China makes inroads into East Africa, gets road contract without bids

ADDIS ABABA – China continues to make inroads into Africa, as it bagged yet another major order for building an 80-km expressway in Ethiopia. The order was given without any bidding as the construction of the six-lane expressway would be financed through a Chinese soft loan worth over $700 million.

China’s state infrastructure major, China Road and Bridge Corporation (CRBC), has signed an agreement to construct a new expressway connecting Ethiopia’s capital to another city in the centre of the country, Nazreth.

CRBC and the Ethiopian Roads Authority (ERA) signed a soft loan agreement of 8 billion birr ($701 million) for constructing the 80-kilometre highway.

In fact, the soft loan was the key to the Chinese state company getting the contract without any bidding. This has been one of the successful strategies used by state Chinese companies to bag orders, causing China-Africa trade to grow to $106 billion in 2008.

Earlier, Ethiopian Works and Urban Development Minister Kassu Ilala announced that the builder of the Addis-Nazareth expressway would be awarded without a bid to a Chinese company. The minister made the remarks in a joint discussion with a high level delegation from China led by the Chinese Construction Minister Wang Guangtao after the Chinese pledge to finance the project with a soft loan.

Kassu said the contract for the construction of the six-lane road – the first of its kind tolled road in Ethiopia – would automatically be granted to China without having to compete for the contract.

“This project is a special offer to Chinese companies of choice to come with the necessary credit facilities and get the project without any international competition,” Minister Kassu had said.

CRBC is currently undertaking three road construction projects in Addis Ababa costing over 40 million dollars.

Besides, another Chinese company is also constructing Ethiopia’s first private industrial zone on the highway connecting Addis Ababa to Nazreth.

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