The govt finds the Mamamah Int’l Airport initiative as ‘uneconomical’
Sierra Leone • Sierra Leone has scrapped a €347 million (RM1.67 billion) scheme for a Chinese-built airport, saying the project was too costly, but Beijing sought to dismiss the concerns yesterday.
In a statement, the Ministry of Transport and aviation said “after serious consideration and due diligence”, the government had determined the Mamamah International Airport initiative was “uneconomical”.
All contracts under the project are being terminated, it said on Wednesday.
China’s Foreign Ministry said yesterday the assertions that projects “do not contribute to local livelihoods do not correspond with the facts”.
“When cooperating with Sierra Leone, China always follows the principle of equal consultation,” spokesman Lu Kang told reporters during a regular press briefing.
Critics said China’s approach to development abroad is exacerbating debt problems in poorer countries, but Chinese and African leaders rejected such concerns at a summit in Beijing last month, with President Xi Jinping pledging another US$60 billion (RM246 billion) for the continent.
Sierra Leone’s previous president, Ernest Bai Koroma (picture) , signed a loan agreement with China for the airport shortly before elections in March that his party lost.
His successor, Julius Maada Bio, vowed to stop the scheme.
He also lashed Chinese infrastructure projects generally as “a sham” that brought the impoverished West African state scant economic benefit.
The scheme entailed building a new airport around 50km outside the capital Freetown.
It would be completed in 2022, and managed and maintained by the Chinese.
But critics questioned the need for a new airport given that Freetown’s existing airport, Lungi, is operating below capacity.
The government on Wednesday said it was looking into the possibility of building a bridge between Freetown and Lungi airport — a scheme that has been priced at more than US$1 billion.
The airport and another major Chinese project, a toll road, shouldered their way into Sierra Leone’s presidential election in March.
Several candidates declared the schemes were unaffordable and should be scrapped or reviewed.
Bio went furthest, going on record as saying “most of the Chinese infrastructural projects in Sierra Leone are a sham with no economic and development benefits to the people”.
China has provided infrastructure and development aid to Africa since the Cold War.
But its interest and presence in the continent have grown exponentially in the past two decades, in parallel with its emergence as a global economic giant.
China overtook the US in 2009 as Africa’s biggest trading partner.
Chinese loans, meanwhile, have soared, especially in transport and energy infrastructure.
Some analysts have warned of a debt trap as some of the world’s poorest states struggle to repay their borrowings.
Between 2000 and 2017, China’s government, banks and contractors lent African countries US$143 billion, according to the China-Africa Research Initiative at Johns Hopkins University in Washington.
Meanwhile, Forbes reported that Pakistan should either follow Malaysia or turn into the next Sri Lanka to solve the debt problem of the Islamic republic.
In the article by Panos Mourdoukoutas, the professor and chair of the Department of Economics at LIU Post in New York opined that the International Monetary Fund (IMF) would not solve Pakistan’s soaring foreign debt.
“Pakistan has a couple of choices. One of them is to cancel Chinese projects, as Malaysia did back in August. The other choice is to allow China to turn debt into equity, as Sri Lanka did back in July.
“Pakistan’s new leader Imran Khan inherited several problems from the previous leadership. One of them is the soaring foreign debt, fuelled by loans from China to finance the China-Pakistan Economic Corridor (CPEC). It’s a collection of infrastructure projects built by Chinese construction companies throughout Pakistan,” he said.
The republic’s external debt soared to US$95.1 billion in the second quarter of 2018 (2Q18) from US$91.8 billion in 1Q18.
That is an all-time high, and well above the average of US$54.1 billion for the period 2002-2018.
“A soaring foreign debt in the face of rising current account deficits and falling foreign currency reserves have made Pakistan dependent on foreign capital flows. “And left Khan with no choice but to knock on the door of the Washington-controlled IMF again,” he added.
While the IMF may ease Pakistan’s problem, it won’t solve it as long as it keeps on building the CPEC.
“That leaves Khan with two choices. One is to cancel Chinese projects to save funds, as Malaysian Prime Minister Tun Dr Mahathir Mohamad did back in August. He cancelled two major infrastructure projects by Chinese companies for adding to the country’s heavy foreign-debt burden.
“The other choice for Khan is to reschedule the country’s debt to China. Perhaps, by swapping debt with equity, which in essence will transfer the CPEC ownership to Beijing,” he said.
Mourdoukoutas said that was the model China applied in reschedulling Sri Lanka’s debt, turning the country’s Hambantota port officially into China’s own port, for 99 years.
“This was done in accordance with a landmark agreement signed early last year. It gives China Merchants Ports Holdings Co Ltd — an arm of the Chinese government — 70% stake in the Indian Ocean’s key outpost.
“As was the case with CPEC, the Hambantota port expansion began with loans from China. But when Sri Lanka could not pay back the loans, Beijing converted these loans to equity, in essence turning Sri Lanka into a “semi-colony”, though in a subtle way.
“That’s what will eventually happen to Pakistan when China takes over CPEC, and end up collecting tolls from every vehicle that passes through,” he concluded. — AFP