Sunday, 27 September 2020

China makes big impact in Colombia: The year of Chinese transport infrastructure

2019 was the year in which Chinese companies finally made their way into Colombia, which had perhaps been most skeptical about investment from the region’s second-largest trading partner.

Two weeks ago, headlines were full of the purchase of the gold mining company Continental Gold by the Chinese Zijin Mining Group, in truth, it opened Colombia’s door to Chinese capital and its companies through the transport and infrastructure sector.

Four business deals stand out: the contract to build the long-awaited Bogota metro; the entry of electric bus fleets into Medellín and Cali; the award of the Mar 2 highway; and the bid for the suburban train in the Bogotá metropolitan area.

Dialogochino.net reports this marks a notable turnaround in the relationship between the two countries, despite the fact that Colombia remains one of the few countries in the region not to join China’s flagship Belt and Road Initiative.

- paying the bills -

China’s ambassador in Bogotá, Xu Wei, acknowledged in October that “so far, due to the lack of knowledge and trust, we do not have a very good economic and commercial relationship”.

Bogotá metro signals transport infrastructure advance

In October, Bogotá chose two Chinese companies as winners of the tender for the construction of the first line of its metro, which will begin in 2020.

This decision – the contract for which was signed on 27 November – should put an end to a saga that has lasted more than half a century. Bogotá has seen successive plans to build the metro presented and then fall apart. People spoke of it more as a myth than of something feasible. While cities the same size as Bogotá, such as Lima, built their metros, Colombia’s capital, which has 7 million inhabitants, remained one of the world’s largest metropolises without a metro system.

The company is made up of APCA Transmimetro, a consortium which is 85% owned by China Harbour Engineering Company Limited (CHEC), which is a subsidiary of the state-run giant China Construction Communications Company (CCCC) and ranked 110th in Fortune magazine’s top 500 global companies. Xi’an Metro Company Limited, a company from Shaanxi province that operates mainly in China and was in charge of the construction and operation of the Xi’an subway, holds 15%.

In the end, competing with a single rival and submitting the lowest bid of 13.8 billion pesos (US$4.5 billion), the Chinese consortium was awarded the Bogota subway contract, despite having little experience building metros, having faced a number of scandals surrounding some of its projects in countries such as Costa Rica, Panama, Sri Lanka and China itself.

- paying the bills -

Its mission will be to build the first line of this elevated subway, comprising 23.96km of viaduct and 16 stations, crossing the Colombian capital from south to north. The Bogotá Mayor’s Office estimates that it will be able to transport 72,000 passengers per hour, helping to reduce pressure on the Transmilenio bus rapid transit (BRT in English) system. Although the characteristic red buses now account for 50% of Bogota’s transport, they can no longer support demand.

Two Chinese companies will begin construction of the first line of Bogotá’s subway in 2020 (image: Bogotá Metro)

The only customers for the regional tramway

The subway is not the only area awaiting attention in Bogota’s transport system.  Another key project for the capital is the commuter train that will connect the city with four of its most populous neighboring municipalities.

The Western Tram-Train, projected to begin operating in 2023, will be an electric-powered tram that will travel the 41 kilometers that separate the center of Bogotá from Facatativá, stopping at 17 stations as it traverses the suburbs of Madrid, Funza and Mosquera.

These towns are an important part of the local industry and are also hubs for thousands of people who travel to work daily in Bogotá. Some 465,000 people live in these commuter cities, according to the 2018 census. Colombia’s first inter-municipal train could transport up to 120,000 passengers a day, reducing the current two-hour travel time to just 50 minutes.

There were several companies interested in the 3.4 billion pesos project (US$1 billion), which will be awarded this 23 December, but in the end, the only one that submitted an offer was China Civil Engineering Construction Corporation (CCECC). A subsidiary of the state-run giant China Railway Construction Company (CRCC), CCECC ranks 59th on the Fortune 500 list of companies and has no previous projects in Colombia, although it is building three road projects in Ecuador.

The first green buses roll

This year, two Colombian cities joined other Latin American pioneers including Santiago de Chile in moving to a fleet of electric public buses.

- paying the bills --

In November, Medellín added the first 17 electric buses manufactured by the Chinese company BYD to its Metroplús public transport system. The purchase of 64 buses made Colombia’s second city the owner of the second-largest electric fleet in the region, with the local government providing 100% of the cost. The deal was won following a tendering process in which two other companies offered the Chinese-made Yutong and Zhongtong Bus buses.

In Cali, a first group of 26 electric vehicles manufactured by the Chinese company Sunwin Bus Corporation hit the streets in September. In all, Colombia’s third-largest city set itself the goal of introducing 125 electric buses into its Western Mass Integrated Transport (MIO) system this year.

Medellín and Cali are the first cities to advance Colombia’s goal under the Paris Agreement of replacing 75% of public buses in seven cities with zero-emission vehicles by 2040.  Bogotá was overtaken. Having faced greater difficulties in adapting its transport infrastructure and given that China already has a solid market for ordinary electric buses, such as those bought by Medellín and Cali,  the capital has not found alternatives for the articulated and bi-articulated buses it uses in the TransMilenio system.

Electric technology has an additional attraction for Colombia given that 70% of electricity comes from hydropower, the country has a cleaner energy matrix than most, and therefore buses would further contribute to an even greener energy scheme.

Cali and Medellín are two of the leading cities in Latin America in the purchase of electric buses for their public transport systems (photo: Office of the Mayor of Cali)

A motorway to the south

In November, President Iván Duque announced that another Chinese company was chosen to complete a highway in the south of the country that has experienced many problems.

The 456-kilometre road between the cities of Neiva and Mocoa forms part of the ambitious ‘fourth generation’ or 4G road plan launched by former President Juan Manuel Santos. This route is fundamental because it would integrate the Putumayo region on the border with Ecuador, which historically has had many problems accessing markets and continues to be one of the epicentres of coca cultivation.

The construction company for this roadway will be CCA Colombia Corp., a subsidiary of China Construction America. That company, in turn, is part of the state-run giant China State Construction Engineering Corporation (Cscec), ranked 21st on Fortune’s list of the world’s largest companies.

Although it was supposed to be ready by the end of 2019, the construction of the road has come to a standstill. It is Barely 5% complete owing to Aliadas, the consortium that was awarded the contract in 2015, has declared bankruptcy. This followed its main partner and builder, Carlos Solarte, being implicated in the corruption scandal that hit the Brazilian multinational Odebrecht.

However, almost a month after the announcement, there is still no documentation in the National Infrastructure Agency (ANI) confirming that the Chinese construction company will take control of the project, nor any certainty that work will resume any time soon, local independent news website La Silla Vacía reported.

These announcements seem to show that, as Duque said on his state visit to Beijing and Shanghai in August, Colombia wants to develop a relationship with China that goes beyond its million-dollar oil sales.

Read the original at Diaologochino.net.

Article originally appeared on Q Colombia and is republished here with permission.

Q24N
Q24N
Q24N is an aggregator of news for Latin America. Reports from Mexico to the tip of Chile and Caribbean are sourced for our readers to find all their Latin America news in one place.

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Article originally appeared on Q Colombia and is republished here with permission.

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