China is currently facing invested related difficulties after being cornered by African countries who are cancelling their contracts with Chinese companies, according to a media report.
An article in the Singapore Post on Monday claimed that some of the countries had cancelled contracts with Chinese companies citing “shoddy" work.
The situation came to the fore when Ghana cancelled the contract of the Beijing Everyway Traffic and Lighting Tech company, which was taken on board to develop an intelligent traffic management system for the country.
Following the cancelling of the deal, President of the Democratic Republic of Congo (DRC) Felix Tshisekedi called for a review of mining contracts previously signed with China in 2008 and expressed his desire to get fairer deals for his country.
Unhappy with China’s exploitative tendency, he said, “Those with whom his country signed contracts are getting richer while DRC people remain poor."
According to the publication, deals signed with Chinese state-backed firms Sinohydro Corp and China Railway Group by former Congo President Joseph Kabila required Chinese companies to build roads, hospitals and bridges in the Democratic Republic of Congo in exchange for a 68 percent stake in the country’s Sicomines venture.
However, a lack of transparency in the workings of the Chinese companies cost them these projects. Ghana government cancelled the project after they found Everyway Traffic and Lightning Tech’s work not up to the mark.
Meanwhile, last year a Kenyan High Court ordered the cancellation of a USD 3.2 billion contract between Kenya and China for the construction of the Standard Gauge Railway terming it “illegal" and stating that the state-run Kenya railways failed to comply with the country’s law in the procurement of the Standard Gauge Railway.
Another reason for such cornering was also the Covid-19 pandemic and its impact on the economy which made several African countries to service loans they have taken from China extremely difficult. Hence, with limited choice to manage debt burdens, African countries have preferred to suspend projects which are controversial or cut sorry figures on the accountability front.
Such losing out on projects has Beijing worried as most of the Chinese projects getting scrapped in Africa are part of Beijing’s ambitious Belt and Road Initiative.