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China’s CCCC takes the long view

By Rémy Darras in Beijing for Jeune Afrique. Additional reporting by Baudelaire Mieu in Abidjan
Posted on Monday, 16 April 2018 09:13

China Communications Construction Company (CCCC)’s footprint is expanding rapidly. With funding from state-owned Export-Import Bank (Eximbank) of China, the construction behemoth is spearheading infrastructure development along the Atlantic Coast, from large deep-sea ports and spectacular suspension bridges to underwater tunnels, new cities, artificial islands and railway lines.

The multibillion-dollar conglomerate, which was established in December 2005 after the merger of the China Harbour Engineering Company (CHEC) and China Road and Bridge Corporation (CRBC), generated some $70bn in revenue in 2016 and secured a further $40bn in new contracts.

“In Africa, it’s in Ethiopia that CCCC has had the most ongoing projects to date, and this is where our expansion has been the most successful,” says Changmiao Zha, deputy general manager of CCCC.

Since 2008, the Chinese giant has been involved in a long line of projects totalling more than $2.4bn, with more than $3.6bn in ongoing work. The company is currently involved in the Tema port expansion project in Ghana. In July 2017 its subsidiary CHEC was part of the consortium – with France’s Bolloré and CMA CGM – awarded a 25-year contract for the operation of the deepwater container terminal at Kribi in Cameroon. This was after being selected for the first and second phases of the port construction.

Other projects are under way in Gabon and Senegal, where CRBC is scheduled to complete the two-year construction of the Thiès-Touba toll highway this year. In Côte d’Ivoire, CHEC is spearheading a major expansion project at the Port of Abidjan. The project will broaden and deepen the Vridi Canal – the port’s main entry passage – to enable handling larger vessels. The Ivorian authorities are pressing the company to complete the work this year, though only 40% is done to date. Of the total 860bn CFA francs ($1.6bn) required for the project, $560bn has been loaned by China’s Eximbank.

watching and waiting

According to Qingshan Liang, CCCC’s deputy general manager for West and Central Africa, road construction forms the next stage of its Africa development: “The overland transportation infrastructure in the region is not complete and air transport is still a bit expensive. So to open up the way to prosperity we first have to build roads and railways.” Zha explains further that the group’s strategy is ultimately to move from its “role as a constructor to that of an investor, developer and operator”.

Thierry Pairault, a China-Africa specialist at France’s Centre National de la Recherche Scientifique, says CCCC is not leapfrogging its way there: “For them, it is more of a plan to position themselves at a certain point in the chain that enables them to better advance their interests”. This approach is at odds with the ‘steamroller’ image often associated with major Chinese companies. With their port projects, Pairault says, “they are acquiring an observation post to get advance knowledge of what logistical needs the port will generate [such as a port extension or railway] and be the first to bid for tenders. They will then offer solutions to local governments, providing feasibility studies, often free of charge.”

CCCC’s Africa success has been tainted by financial problems in countries like Algeria, where work on the new El Hamdania port project has come to a standstill. Beijing has reduced its funding to African states, aware that under their current financial difficulties not all loans will be repaid. But if all else fails, the publicly traded company can always fall back on the steady flow of Eximbank’s funds to strengthen its growth in African markets.

Rémy Darras in Beijing for Jeune Afrique. Additional reporting by Baudelaire Mieu in Abidjan

The illuminated Pont du 15 Août 1960 in Brazzaville, Congo, engineered and built by CRBC

From the March 2018 print edition

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