China-driven rail development:lessons from Kenya and Indonesia

Abstract

China’s considerable success in expanding its domestic railway network, especially its high-speed rail capacity, has drawn the attention of Global South governments. This, together with rail’s prominent place in the Belt and Road Initiative (BRI) and the willingness of Chinese banks to fund railway projects, has made China a major provider of rail infrastructure around the world. This policy briefing examines the environmental, socioeconomic and governance (ESG) impacts of two such projects, in Kenya and Indonesia. Both cases show problems in terms of environmental and socio-economic mitigation. These are compounded by significant lapses in (and constant controversy around) their governance. In both cases the projects raise questions about local governance, in addition to incurring serious delays and financing issues. Overall, the briefing demonstrates some of the challenges facing Chinese rail provision in the Global South, especially how weak recipient institutions can compound reputational risk.