CHINESE PARTICIPATION IN AFRICAN INFRASTRUCTURE DEVELOPMENT: The
case of the DRC and Zambia
Report written for the China-DAC Study Group Event on Infrastructure, from 19-20 September in Beijing
20 September 2010
Mr. Hans E. Petersen, MSc, BA (Foreign Trade) Infrastructure Specialist for Grontmij | Carl Bro Ms. Sanne van der Lugt MSc,
This publication has been produced with the support of the EU-China Policy Dialogues Support Facility, a project co-funded by the European Union and the People’s Republic of China, implemented by a consortium led by Grontmij | Carl Bro A/S.
The content of this publication is the sole responsibility of its authors and can in no way be taken to reflect the views of the European Union.
本出版物由中国-欧盟政策对话支持项目提供支持。中欧政策对话支持项目由中国和欧 盟共同资助，由以Grontmij | Carl Bro A/S 公司为首的咨询机构实施。
该出版物的内容由其作者承担唯一责任，不能被认为反映欧盟的观点
The findings, interpretations, and conclusions expressed therein are those of the authors and do not necessarily reflect the views of Grontmij | Carl Bro or the Centre for Chinese Studies.
Acknowledgements
The research team comprising of Mr. Hans E.H. Petersen en Ms. Sanne van der Lugt, would like to thank:
Grontmij | Carl Bro for organising and managing the overall research project for the China-DAC Study Group event of which this field research report is part.
The European Commission for kindly funding the research and providing advice and support.
The Chinese, African and EU government officials, as well as the Chinese contractors with whom the research team met in-country for their generosity and frankness in sharing invaluable insights in the interviews;
Prof. Victor Chen for getting the research team into contact with the Chinese contractors and Embassies in the DRC and Zambia;
The Centre for Chinese Studies at Stellenbosch University for sharing their network, resources and office space with the research team;
Cover picture taken in the DRC by Sanne van der Lugt: Bridge, part of the Projet Travaux de Rehabilitation de la Route Nsele-Lufimi, Lot 1.
Contents
List of Acronyms and Abbreviations 5
Summary 6
Recommendations 7
Introduction 8
Section 1 Methodology 9
1.1 The Research Team 9
1.2 Projects visited 10
Section 2 Field Research Findings 12
2.1 Interviews in the DRC 12
2.2 Interviews in Zambia 16
2.3 Infrastructure projects in the DRC and Zambia 19
Section 3 Analyses of the Findings 22
3.1 Evaluation criteria 22
3.2 Development strategies and modalities 23
3.3 Sustainability 24
3.4 Impact and effectiveness 26
3.5 Efficiency 29
Conclusions of the field research 30
References 32
Annex 1 Summary of Case Studies 33
List of Acronyms and Abbreviations
ACGT Agence Congolaise des Grandes TravauxAfDB African Development Bank
BOT Build-Operate-Transfer
CDB Chinese Development bank
CP Cooperating Partner
CREC 7/8/9 China Railway Engineering Corporation – numbers denotes subsidiaries CRBC China Road and Bridge Corporation
DAC Development Assistance Committee
DFID Department for International Development
DRC Democratic Republic of Congo
EC European Commission
EIA Environmental Impact Assessment
EU European Union
EXIM Bank Chinese Export-Import Bank
FDI Foreign Direct Investment
GoZ Government of Zambia
ICB International Competitive Bidding
IPRCC International Poverty Reduction Centre in China KNBE Kariba North Bank Extension Project
KNBEPC Kariba North Bank Extension Power Corporation Ltd MOFCOM Chinese Ministry of Commerce
OECD Organisation for Economic Co-operation and Development
PRC People's Republic of China
SIA Social Impact Assessment
SOE State Owned Enterprises
UCOP Unité de Coordination des Projets
UK United Kingdom
USD US Dollars
WB World Bank
ZESCO Zambia Electricity Supply Corporation Limited
Summary
Numerous studies point at an immense backlog in many African countries in investments in the development of infrastructure and in improving the reliability and condition of services provided by the existing infrastructure. During recent years, Chinese infrastructure financing commitment to Africa has increased exponentially and has now reached a level comparable to that of other international donors, if not more.
The research team was assigned by the International Poverty Reduction Centre in China (IPRCC) and the Development Assistance Committee (DAC) of the Organisation for Economic Co-operation and Development (OECD) to examine efficiency, impact and sustainability of Chinese participation in infrastructure development in Africa. The DRC and Zambia were chosen for selection of case studies. To compensate for the absence of completed projects which are needed for an evaluation, the research team undertook a large number of case studies with different perspectives. The Chinese assistance to the African infrastructure sector has lead to misconception regarding selfish motives, imperfect project preparation and implementation as well as severe criticism from international donors and the press. Obviously there are imperfect projects, with sustainability problems, when operating at the scale of investment applicable to the Chinese investments. However, according to the research team these allegations basically appear to be unfounded.
The Chinese donors and the consulted government agencies recognise that there are two distinctly different approaches to provision of aid/loans. The Chinese approach to development investments is based on several criteria described in the Beijing Declaration of the Forum on China-Africa Cooperation 2006.1 According to Congolese authorities2 these criteria for cooperation lead to the following: win-win situation; job-creation; transfer of technology; transfer of education; and transfer of social advances. Investments made in this manner were referred to by these authorities as: “silent, diligent, efficient, on equal partnership terms, at low labour costs, and without political conditions”.3 However, the message the research team got from some of the Congolese employees of the Chinese contractors in the DRC was much less positive. The approach by Western donors is a process developed through many years of development work. The process is transparent and leads to high quality in project selection, preparation, and implementation. The recipient’s agencies consider that these investments require long talks about investments, lengthy feasibility studies, provide loans subject to conditions, and that they are costly.
The responsibility for the selection of projects, which in the case of Chinese investments is left to the recipient, should not be outsourced but always remain a joint responsibility of all parties of the investment. Such issues are in international donor projects subject to a lengthy economic, technical, social, and environmental appraisal, whereas they are treated more leniently in Chinese projects.
Impact and sustainability depend on the appropriate handling of the project formulation and appraisal phase of the project. The operation and maintenance which reflect respectively the impact and the sustainability had apparently not been dealt with in these case studies. A limitation of competitive bidding in Chinese projects could have affected bid results reducing the efficiency and limiting the total number of affordable projects. WB projects with co-financing by bilateral donors show the same tendency. Implementation was generally performed at an apparently fair quality of the works inspected, in a timely manner, without grievances with the public and the labourers.
1
Accessed on 10.09.2010 from http://english.focacsummit.org/2006-09/20/content_623.htm. 2
Interview with representatives from Agence Congolaise des Grands Travaux (ACGT) in August 2010. 3
Recommendations
The research revealed that there is a profound need for coordination of donor activities between the Chinese and the international donors. It is recommended that the OECD and the Chinese donors should communicate to learn and to optimise efforts. At national level, the recipient should be involved to avoid a top-down approach to such coordination.
It is obvious that there are limitations in both approaches to project identifications, preparations, procurement and implementation applied by cooperating partners of the OECD (OECD CPs) and by Chinese investments. It is recommended that the many good practices of the OECD CP approach should consider means to shorten the time required for identification through to commissioning of projects without compromising the transparency and the high quality of project development.
Correspondingly, Chinese project development lacks information which is important for reducing negative impacts on the local community and the environment and for achieving sustainable projects. A life time analysis of the projects including environmental impact assessments (EIAs), social impact assessment (SIAs) and maintenance planning should be carried out. EIAs and SIAs should be performed subject to the national environmental acts of the receiving country. The good practices of OECD CP projects should be explored and where appropriate applied.
The responsibility for the selection of projects, which in the case of Chinese investments is left to the recipient, should not be outsourced but always remain a joint responsibility of all parties involved in the project. It is recommended for the benefit of the beneficiary countries, that the traditional CP-GOV dialogue on sector priorities should also be guiding to the Chinese actors and that their investments should be channelled to such projects (as good practise).
Introduction
This Field Research is part of a Study for the International Poverty Reduction Centre in China (IPRCC) and the DAC committee of the OECD on Infrastructure: The Foundation for Growth and Poverty Reduction, in the context of China’s economic co-operation with Africa and the lessons that China and more established donors can share with each other to increase the collective impact of foreign aid on reducing poverty in Africa. The study is presented in three reports, namely: (1) The Impact of Infrastructure on Growth and Poverty Reduction in China, (2) Chinese participation in infrastructure development in Africa: Roles and impacts, and (3) Chinese participation in infrastructure development in Africa: Case Studies in the Democratic Republic of Congo and the Republic of Zambia.
This report, volume 3, presents findings of the field research in the Democratic Republic of Congo (DRC) and Zambia on Chinese investments in infrastructure projects. The aim of this report is to complement the findings in the literature with findings in the field and to study the sustainability, efficiency and impact of a number of infrastructure projects in which Chinese contractors are involved in Africa. The main research question is:
How is the efficiency and sustainability of the Chinese investments in infrastructure projects and what is the impact on economic growth and poverty reduction in the DRC and Zambia?
In order to examine the efficiency, impact and sustainability of the Chinese participation in infrastructure development in Africa, the research team adopted the concepts and tools of the Logical Framework Approach (LFA). The LFA to Project Design is a method used extensively by the international donor community for project development, project monitoring and project evaluation. It is logical and provides a very useful tool from project formulation through development to evaluation. The LFA requires us to reach consensus on the overall plan for the project – the goal, objectives, outputs and activities. It furthermore forces development actors to think through the relationship between where they want to go (the impact) and what they are going to do (the inputs and activities), and the intermediate steps on the way. How this framework has been used in this particular study is further explained in the methodology section of this report.
Further, in order to assess the participation of China's role in infrastructure development in Africa this present report is divided into three main sections: the first section after the introduction explains the methodology used during this field research. Section two presents the information and data that was gathered during the site visits and in the interviews with relevant institutions. The information in this section will provide a deeper understanding about how the Chinese support to infrastructure development in Africa is structured, the selection procedure of the projects, how the funding is arranged and about how development support and private investments are intertwined. Section three links the findings of the field research to the evaluation criteria using the LFA framework.
Throughout the report we make an effort to put the information on China's involvement in infrastructure development into context by comparing it to the impact that the more established donors have. The findings of this research thereby lead to some recommendations to improve cooperation between the People’s Republic of China (PRC) and the more established donors and the recipients.
1.
Methodology
In accordance with the assignment; inspection and inquiries were made at a number of infrastructure projects in which Chinese contractors are involved in the DRC and Zambia to identify issues regarding sustainability (including maintenance, cost recovery, and environmental impact), achieving efficiency in the delivery of infrastructure and increasing the impact on growth and poverty reduction.
The LFA provides a useful framework (see figure 1) for analysing the impacts of the Chinese investments in infrastructure projects in the DRC and Zambia on poverty reduction.
Figure 14: Link between the Evaluation Criteria and the Logframe
We started following the flowchart the other way around and first established at every project what the objectives were. Were there any development aid objectives? When we knew the objectives, we asked about what outputs of the projects were linked to these objectives, what activities were implemented and then, lastly, which resources were used to support these actions. In this way, we were able to analyse the impact, effectiveness, efficiency, relevance and sustainability of the projects, in this order.
1.1
The Research Team
The Field Research was undertaken in the Democratic Republic of Congo (DRC) and the Republic of Zambia (ZM) during 28/8 – 3/9 2010 by Ms. Sanne van der Lugt, Research Analyst at the Centre for Chinese Studies at Stellenbosch University, and Mr. Hans E. Holm Petersen, Infrastructure Specialist for Grontmij | Carl Bro.
4
Prior to the site visits, questions and issues to be investigated were identified in liaison with Mr. Victor Chen, Lecturer at Melbourne University, Australia, and Mr. Wang Haimin, Social/Resettlement Specialist at the China Agricultural University in Beijing, Peoples Republic of China. Mr. Chen brought the team into contact with Mr. Sun Jian Wei from China Roads and Bridge Company, Democratic Republic of Congo, and Mr. Li Ming, Chief Representative for Sinohydro, Republic of Zambia. They supported the field studies by introducing the research team to other Chinese contractors, the Chinese Ambassadors to the DRC and Zambia and local government officials. Mr. Sun and Mr. Li joined the team on the way to and during the interviews, and were therefore part of the research team and our numerous discussions before and after the interviews made them also our key informants.
1.2
Projects visited
The field work consisted of observations during site visits and interviews with Chinese contractors and engineers at the projects, supplemented by interviews of representatives of the Chinese Embassies and the EU Delegations, government agencies and the public in the DRC and Zambia, .
The research team visited the following project sites: DRC
• Projet Travaux de Rehabilitation de la Route Nsele-Lufimi, Lot 1, Sinohydro, AfDB & EU supported, Kinshasa Province
• Boulevard 30. Juin, CREC7, Kinshasa • Boulevard Triomphal, CREC8, Kinshasa • Boulevard du Turisme, CREC8, Kinshasa
• L’Hopitale du Cinquantenaire, Sinohydro (Eric sent me a message about this mistake), Kinshasa • Boulevard Lumumba, CRBC, Kinshasa
• Projet Biayi Street, CREC7, Lubumbashi
• Lubumbashi-Kasenga (ZM Border), CREC7, Katanga Province Zambia
• Kariba North Bank Extension Project, Sinohydro, Chinese Credit, Lake Kariba, Southern Province Furthermore representatives of the following organisations were interviewed:
DRC
• Chinese Embassy
• Agence Congolaise des Grands Travaux (Programme Sino-Congolais) • EU Delegation
• Local journalist
• UCOP; Unite de Coordination des Projets (Fully supported by the World Bank) Zambia
• Chinese Embassy
• Kariba North Bank Extension Power Corporation Ltd. (Subsidiary of ZESCO) • EU Delegation
The project sites are shown in Figure 2 below.
Figure 2: Location of Case studies5
5
From the websites of the Jet Propulsion Laboratory of the California Institute of Technology (http://www-radar.jpl.nasa.gov/africamap/drc.htm) NationMaster.com (http://maps.nationmaster.com/country/za/1) and TripSpeak.co.uk (http://www.tripspeak.co.uk/category/maps-of-the-world/map-fo-africa/)
2
Field Research Findings
2.1
Interviews in the DRC
With the end of the recent civil war in the DRC an attempt for reunification has been made. Besides political reunification, the focus is on economic and social reunification as well. The DRC receives about USD 400 million per year from donors, since the end of the war in 2002, however, it needs billions of USD per year for its reconstruction. Every project seems to have priority at the moment. In order to reconstruct the country in a quick but coordinated manner, President Kabila requested consensus between the different departments and a joint reconstruction and reunification strategy and started a special program: les cinq chantiers that represent the 5 areas of priority, namely: infrastructure, health and education, water and electricity, housing, and employment. There seems to be consensus that the focus of the development of the DRC needs to be on infrastructure. l'Agence Congolaise des Grands Travaux (ACGT) was founded in 2008 in order to combine and manage the big infrastructure projects with high priority.
Public versus private investments
When the Research Team asked the Chinese Ambassador to the DRC, H.E. Wu Zexian, about China's involvement in development assistance, the Ambassador, explained that Chinese actors are in three different ways involved in the development of infrastructure in the DRC, namely:
1. Bilateral (Financed by China directly to the DRC and the work is done by Congolese companies); 2. Chinese private companies( e.g. Sinohydro as the road contractor for the Nsele-Lufimi Road
Rehabilitation Project);
3. A new structure of cooperation between Chinese and Congolese companies supported by funding (from China) and raw materials for barter trade provided by the Congolese Government (Examples are the Angola model6 and the Sicomines agreement. The latter will be explored more in-depth in this report.)
The Ambassador further states that at the moment there are not that many Chinese private investments in the DRC. Instead, most projects fit in the framework of Development Aid. The only two private investment projects in the DRC, according to him, are two road projects for which the Chinese investors ask payage (toll) in order to get a return. However, it is not easy to make a distinction between foreign direct investment (FDI) and development aid when classifying the Chinese projects in the DRC. One of the reasons for the lack of clarity is that many Chinese actors (private as well as public) are involved in those projects and they have different perceptions of the function of these projects. This is an effect of the Sicomines agreement, a new Public-Private Partnership agreement between the Congolese Government and Chinese (public) companies.
The money that is internationally available for Development Aid is limited and the DRC is in need of much more money than it yearly receives. All reconstruction and development projects have priority in the DRC at the moment and there is only limited money available. Therefore, clever choices need to be made. The
6
Chen, V., 2010. Chinese participation in infrastructure development in Africa: Roles and impacts. Prepared for the China-DAC event on infrastructure in Beijing September 2010.
DRC is rich in natural resources, especially: copper and cobalt. A possible solution would therefore be to develop these mines first and use the profits for the development of the infrastructure. However, first of all, it takes at least three years before a mine becomes operational and, secondly, there is money needed to develop these mines and the DRC is not able to borrow any more money since they already have a debt of USD 3 billion. Therefore, investors are attracted. The Congolese Government knew about the model The PRC is applying to Angola in which oil is exchanged for infrastructure and decided that a similar framework could be set up with their mines. The PRC is in need of natural resources and saw great potential in this deal. This new deal started thus from the needs from both the DRC and the PRC.
Sicomines Agreement
A special structure was established in order to distribute the project for Les cinq chantiers, namely: l’Agence Congolaise des Grands Travaux (ACGT). The ACGT developed three programs for the three biggest investors, namely, in order of size: The PRC, the World Bank (WB) and Belgium. The Programme Sino-Congolais was established to manage the cooperation between two Chinese companies (Sinohydro and China Railway Engineering Corporation (CREC)), Congolese companies and the Congolese Government under the Sicomines agreement. It is an exchange between Chinese actors and the Congolese Government: the DRC provides mining rights and the Chinese build infrastructure in return. According to Mr. Nzau Nzau, the Director of the Department of Strategic Planification within the Programme Sino-Congolais of ACGT, this Sicomine agreement is a commercial activity and it is not part of the Development Aid framework. Selection of projects
The infrastructure projects that are constructed by Chinese companies within this Sicomines agreement are selected via a complex system initiated by Congolese Government departments. According to Mr. Nzau Nzau, the ACGT receives the ‘wish lists’ from all Congolese Government departments and makes then the decision what is most urgent, before sending the list to the Chinese Embassy. The Chinese Ambassador thenGovernment proposes these projects to his government. It is the Chinese Ministry of Commerce (MOFCOM) that makes the final decision about which projects will be financed by the Chinese EXIM Bank and the Chinese Development bank (CDB). According to a Chinese engineer working for CREC 8 in Kinshasa, all the projects EXIM bank funds are part of this GovernmentSicomines agreement. The EXIM bank is financing mainly the small social projects as for example: a 5km road, a hospital, etcetera. The CDB finances the large projects. The projects seem to be divided among the Chinese contractors according to agreements between the two Chinese companies that are part of this Public-Private Partnership, namely Sinohydro and CREC. For these Chinese contractors, the projects are pure business.
There are other ways as well for Chinese contractors to get involved in infrastructure projects in the DRC. For example via Unité de Coordination des Projets (UCOP), a bureau of the Ministry of Planning of the DRC. All UCOP projects, of which more and more are implemented by Chinese companies because of the good experience with them7, are financed by the World Bank who sends the money to the Central Bank of the DRC. In order to develop projects via UCOP, the Chinese contractors have to win an international tender. The approach of UCOP is more bottom-up than ACGT: UCOP can choose the projects themselves and request for money from the WB. According to Mr. Kaleshi, the coordinator of UCOP, they go to the
7
communities and consult them ask them the question: “What do you want us to do?” The mandate of the UCOP is to assess if the projects are feasible, request for money from the WB and choose the right contractor for the project. It is a difficult job, according to Mr Kaleshi, because he needs to make “conventions” with locals, contractors and controllers.
Development objectives and indicators
The research team asked all interviewed parties about the development objectives and indicators that are applied. As mentioned before, the Chinese companies consider the projects as investments and not as development aid. The Chinese Government is not directly involved with the implementation of the infrastructure projects and therefore does not set any development objectives and indicators. The Chinese Government asks the Congolese Government what their priorities are and try as much as possible to accommodate the Congolese needs while they also support their national companies. The Congolese Government departments all have their own wish-list. However, President Kabila requested consensus between the different departments and a joint reconstruction and reunification strategy. This is exactly what ACGT is founded for: to coordinate and manage these big infrastructure projects with high priority. Critique
The agreement between Chinese public companies (State-Owned Enterprises (SOEs)) and the Congolese Government received much critique from the West, represented in, amongst others, the World Bank and the EU. Although the agreement might look controversial, similar forms of exchange between African governments and Chinese companies have taken place already in other parts of Africa: Angola, Gabon and Congo Brazzaville for example. This model of exchange has been coined the “Angolan Model.’8 In these other countries infrastructure was exchanged against oil, and the Congolese Government decided that they could do the same with their mines as well.
The EU representation in Kinshasa showed their concerns about the sustainability of this form of cooperation. The key controversial point in the contract, according to the EU and WB, was that both the Chinese Government and the Congolese Government assured the Chinese companies that they would get their investments back, with interest. According to the European representation in Kinshasa, this is unfair competition and they summed the Congolese Government to not guarantee to pay back the mining Joint Venture if the mine turned out not to be productive enough. This has been changed now in the contract between the Chinese companies and the Congolese Government.
Another criticism from the EU is that the Congolese Government is hardly an equal partner in this cooperation agreement. According to the European representation in Kinshasa, the Congolese Government does not have the capacity to assess the actual value of the mines and the infrastructure projects that the Chinese promise to construct for USD 3 billion. How can the Congolese Government be certain that they get proper value for the resources they are leveraging to the Chinese?
8
Edinger, H. & Jansson, J. (2008). “China’s ‘Angola Model’ comes to the DRC”, China Monitor, issue 34. Accessed on 10.09.2010 from http://www.ccs.org.za/wp-content/uploads/2009/04/china-monitor-october-2008.pdf.
Both the Chinese and the Congolese parts recognise the expertise of the Australians in assessing the capacity of mines, which is why they ask Australian companies to make the assessments. The question then remains if the Congolese Government is able to make the right judgment about the value of the infrastructure projects offered by the Chinese? The coordinator of UCOP, Mr. Kaleshi, seems to be very capable to make good assessments of these projects. He is an international civil engineer, has studied at MIT and in Liege and considers that he has enough experience to tell whether the proposals of foreign contractors' are reasonable or not. The Director of the Programme Sino-Congolaise of ACGT is, amongst other tactics, using the internet to compare the proposals with other, similar, infrastructure projects in the world. “All the information is online; it is very simple nowadays to check if the asking price is reasonable for the project.”9 Both UCOP and ACGT are controlling 'their' projects. ACGT created a construction in which both a Chinese organisation and a Congolese organisation work together to control the project. Some of these controllers are daily at the site, as was confirmed by the Chinese contractors. Admittedly, the Congolese companies do not have a lot of experience with controlling big projects yet. Therefore, for every project there is also a third organisation invited, which is subject to international tendering. This is a temporary solution. As soon as the Congolese companies have learned enough and are on equal foot with their Chinese colleagues, there will not be a third company invited any more.
A third concern from the West is that the Chinese contractors do not feel responsible for any social and environmental impacts that these projects will have for the local community. The UK Department for International Development (DFID) therefore proposed to do all the environmental assessments for the Chinese roads in the DRC. According to the European representation in Kinshasa this was a very controversial proposal, because by making this agreement, the British automatically approved the controversial Sicomines agreement. The Chinese accepted the offer, according to the EU. However, the Director of ACGT says that it is not that simple. “The Chinese and Congolese are very careful with asking DFID to do the assessment, since they know that if there is one topic the West can criticise this deal for, it is about environmental issues”, said Mr. Nzau Nzau.10 The reason for this, according to Mr. Nzau Nzau, is that the DRC is just coming out of war and that everything has priority at the moment. They simply do not have the time to spend years on making the right assessments. Mr. Nzau Nzau agrees that you can also loose with this. However, he does not appear to have a choice.
Another worry from both the West and the local community is that these projects implemented by Chinese companies do not contribute to the creation of jobs, because they will use mainly Chinese workers. The concern is that a chance for technology transfer is missed by using Chinese workers instead of Congolese. Our findings, however, show that currently for most projects at least 75 per cent of the workers for Chinese infrastructure projects in the DRC are Congolese. According to the Chinese contractors interviewed by the research team, they used to have more Chinese workers in the beginning, because the Congolese workers lacked the necessary skills. However, the Chinese started to train the Congolese, sometimes just because it was part of the contract they signed, however, it is beneficial for the Chinese contractor as well, since the Congolese workers are cheaper. This argument is explained more thoroughly in the report on the role of Chinese investments in infrastructure in the DRC also presented at the same China-DAC Study Group event
9
Interview with Mr. Nzau Nzau from ACGT on 30 August 2011. 10
on infrastructure in Beijing.11 At management level, there are very few Congolese working together with their Chinese counterparts. However, at two projects, the team was told that the Chinese have started to train Congolese managers as well.
It is important to notice that Chinese companies are far from risk-free under this special deal with the Congolese Government. Many Chinese contractors told us that they are still waiting for money from the Congolese Government who says is still waiting for money from the donors. While waiting for the money, these Chinese companies temporarily finance the projects by their own money in order to be able to continue. This is a “responsible” approach by SOEs expected by the Chinese Government.
The payments seem to be more efficient if they are distributed via UCOP and ACGT instead of the Congolese Government. Or, another conclusion that can be drawn from the same data, the payments seem to be more efficient if they have one source: either the WB or EXIM bank (see annex 3 for a visual expression of the sources and flows of funding for infrastructure projects in the DRC in which Chinese actors are involved).
In conclusion, this combination of public and private investments might be controversial, and is definitely challenging for all parties. However, considering the possible downfalls, it might be the right solution for the current situation in the DRC.
2.2
Interviews in Zambia
The research team visited the following organisations for identification of issues relevant to the Chinese infrastructure investments in the Republic of Zambia:
• Chinese Embassy – representing Chinese investments • Kariba North Bank Extension Power Corporation Ltd.
• EU Delegation – as representative of the international donor community Public versus private investments
The relative proportion of Chinese development aid and (FDI) to infrastructure development in Zambia was not readily available. The distinction between categories of development aid, FDI and business ventures are measured differently depending on whether the information is used in Chinese statistics or analyses or whether it is used by the international donor community. However, the Chinese Embassy in Lusaka advised that business investments are proposed by the investor whereas development aid is proposed by the Government of Zambia (GoZ) and evaluated by the People's Republic of China (PRC). Examples of Aid Projects include: the construction of roads, water treatment plants, hospitals, a stadium and anti-malaria programs. Public Private Partnerships, as mentioned and explained in the case study of the DRC, are considered a better tool in future infrastructure investment in Zambia.
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A buyer’s credit is opened for investments on terms that are more favourable than the commercial terms. Thereby an insurance premium against default to be paid by the buyer can be obtained from the EXIM Bank.
Selection of projects
The selection of the projects subject to the various categories of funding are done in a similar way as in the DRC. It was stated by the Chinese Embassy that projects are proposed by the GoZ and evaluated by the PRC.12 The Chinese evaluation includes thereby a consideration of the Millennium Development Goals (MDGs) and an assessment of the impact on development for the local society.
This Sino-Zambian cooperation is seen by Chinese and Africans alike as cooperation between equal partners13 and the following assessment of “Donor” characteristics are shared by these partners:
o Western donors Talk long
Perform lengthy feasibility study Progress is desired to be a bit quicker Loans are subject to conditions Have high costs, high allowances Are subject to coordination o Chinese investments
Are silent Are diligent Are efficient
The PRC is a developing country itself and therefore a more equal and understanding partner
Have low labour costs
Have no political conditions attached
These views were similar to those expressed by the Congolese Government agencies.
The Director of the Kariba North Bank Extension Power Corporation Ltd. (KNBEPC) – a subsidiary of the national Zambia Electricity Supply Corporation (ZESCO), shared this perception and explained about their experiences with WB participation. The WB was involved in the Zambian hydropower project development during 1995 - 2006, the Kariba North Bank Extension project (KNBE), the Kafue Lower Gorge project (KLG) and the Itezhi-tezhi project. Initially these projects were studied with WB support. However, it appeared that decisions from the WB were considerably delaying progress in project development and implementation. Only when the GoZ approached the government of the PRC, the WB, belatedly, approached the GoZ with funding solutions. Chinese credits are presently securing the successful implementation of the KNBE and KLG projects.
12
Interview with a representative of the Chinese Embassy on 2 September 2010. 13
Development objectives and indicators
The research team highlighted the need to use development objectives and indicators in the selection, formulation and monitoring of projects in order to ensure a comparator for the prioritisation of projects and to secure that national and project objectives are met. Thereby the need to consider poverty reduction as well as other MDGs was discussed. The research team asked the respondents for comments on how to improve the poverty reduction:
The Chinese Embassy commented that water purification is an example of a health project leading to reduction in sickness and thus higher income and solar or water powered power stations, constructed by Chinese companies, are good for the development of remote areas. An example of implications for poverty reduction from the infrastructure projects in which Chinese actors are involved, are the trainng of local unskilled workers which contributes to an increase in the general level of the skills of the local workforce. The EU Delegation in Zambia, who is the leading partner in the group of Cooperating Partners (CPs) for infrastructure, wondered how the Chinese selection of road projects is made. According to them, the selection does not fit into the priority list as part of the national development plan.
The EU Delegation explained that an ineffectual Ministry of Roads could be a reason to worry about the selection of road projects. According to them, the present Ministry of Roads has no plan for transport, roads, nor a strategy for railways. Therefore, according to them, it would be desirable to have a joint plan agreed by both the PRC and EU/WB.
The official Report of the Auditor General on the Road Development Agency for the Period of January 2006 to September 200914 was highlighted by the EU Delegation. This report is very critical on the achieved quality of the roads. The criticism covers all phases of project planning, programming, preparation, procurement, implementation, operation and maintenance. The criticism includes an over-commitment of USD 250 million.
Coordination between donors
The need for coordination between the donors for ensuring efficient projects, to avoid waste of funds, to lift in cooperation and to learn from mistakes, mentioned by the EU delegation, was discussed with the Chinese Embassy in Lukasa. However, the Chinese Embassy would take the African client’s situation as point of departure: How will the African client feel if the PRC and the western donors coordinate aid? It was appreciated by the EU Delegation that a number of comparative advantages by the Chinese contractors, e.g. cost, quality, efficiency of implementation are parameters to be considered in the coordination of projects. Chinese contractors are known by the EU Delegation to be very efficient for quick mobilisation in urban areas and for mobilisation of contractors in remote areas. The EU Delegation further suggested that distribution of segments of roads could be done among the donors. For example, if Chinese contractors mobilise easier in remote areas than for example the EU, then the Chinese contractors should do those road segments.
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However, the EU Delegation is not sure about who they should contact from the Chinese side in order to discuss the distribution of projects. Is the Ambassador, the commercial or the political head of section the right one to approach? Since the Chinese use feasibility studies to determine the economic feasibility of a project and consider the requirements from the local government, which requested the project, communication is required between the Zambian Government, local stakeholders, and the Chinese Government. The Chinese Ambassador is leading the communication.
The EU Delegation suggested that the donors ought to have a meeting between them to find out what could be done to coordinate development projects better. It was suggested that this would appear to be a top-down approach. Therefore the research team suggests to also inviting the recipients (in the form of government officials and representatives of the local communities) to such a meeting.
2.3
Infrastructure projects in the DRC and Zambia
All the projects visited during the field work in the DRC and Zambia were ongoing. Due to logistics and the comparatively new situation with major Chinese infrastructure investments in the investigated countries it was not possible for the study to focus on projects which would yield a genuine ex-post evaluation suited for impact and sustainability assessments. However, baselines were provided. Either in the form of the part of the road the Chinese constructors did not develop yet or, in the case of the hospital in Kinshasa for example, in the form of pictures of how the former contractor left the project behind.
The evaluation therefore resembles a mid-term evaluation in which it has been necessary to consider the indications suggested by the eventual analysis parameters.
Table 1: Information in the Case Studies Case Study E v a lu a ti o n cr it e ri a R e le v a n ce E ff ic ie n cy E ff e cti v e n e ss Im p a ct S u st a in a b il it y Characteristics of criteria Ob je ct iv e s a n d S e le ct io n cr it e ri a C o st o v e rr u n s a n d d e la y s v e rs u s Q u a li ty O b je ct iv e s a ch ie v e d P o si ti ve /n e g a -ti v e l o n g t e rm e ff e ct s C o n ti n u a ti o n of n e t b e n e fi t fl o w s DR Congo 1. Nsele-Lufimi Road
+
+
o
+
+
2. Boulevard du 30. Juin+
-
o
+
o
3. Boulevard Triomphal+
-
o
+
o
4. Avenue des Touristes
+
-
o
+
o
5. L’Hopitale du Cinquantenaire
+
-
-
+
+
6. Boulevard Lumumba
+
-
+
+
o
7. Lubumbashi Biayi Street
o
-
+
+
-
8. Lubumbashi-Kasenga (ZM Border),
+
+
+
o
-
Zambia
9. Kariba North Bank Extension
+
+
+
+
+
Note Although Relevance and Effectiveness have not been indicated as subjects of the field research, the Research Team has considered these criteria to be important to the overall research and therefore considered these criteria.
Legend + denotes that deductions can be made from the observations during the site visit or the interviews. 0 denotes that limited deductions can be made.
- denotes that no deductions can be made.
As to relevance, the main assumptions have been that projects selected, undertaken or executed under the ACGT (Sino-Congolese Program) have been selected by the Congolese Government and that the Chinese partner has not been involved in the selection. It is further assumed that projects supported by international donors have been selected, and appraised in accordance with criteria for MDG, Economy, Technique, Environment, and Social Development used in international development projects.
Regarding efficiency, only limited information on average bid prices (roads: cost per km) and potential delays have been available. The procurement modality determines the degree of competition.
Generally the achieved effectiveness requires information on the results achieved by the completed project. Apparent removal of bottlenecks, high level of traffic and increased means of livelihood in the
vicinity of the projects would suggest that some of the (to the research team unknown) targets have been met.
Similar considerations apply to the impact parameter.
The sustainability has been assessed based on the apparent availability, or unavailability, of maintenance finance, institutional framework, capacity and capability, the quality of the works and the social and environmental mitigation measures.
3
Analysis of the Findings
In accordance with the assignment, the research team made inquiries at a number of projects in the DRC and Zambia to identify issues regarding three key dimensions of infrastructure development, namely: I) ensuring sustainability – including finance, maintenance and environmental impact, II) achieving efficiency – including planning, resource allocation and public-private partnerships, and III) increasing impact on economic growth and poverty reduction – including procurement approaches, linkages into the local economy and involving poor people in decision-making processes.
A brief summary and explanation of the OECD/DAC evaluation criteria used in international donor projects is indicated below.
3.1 Evaluation criteria
15Relevance The extent to which the objectives of a development intervention are consistent with the beneficiaries’ requirements, country needs, global priorities and partners’ and donors’ policies.
Efficiency A measure of how economically resources/inputs (funds, expertise, time, etc.) are converted to results.
Effectiveness The extent to which the development intervention’s objectives were achieved, or are expected to be achieved, taking into account their relative importance.
Impacts The positive and negative, primary and secondary long-term effects produced by a development intervention, directly or in directly, intended or unintended.
Sustainability The continuation of benefits from a development intervention after major development assistance has been completed. The probability of long-term benefits. The resilience to risk of the net benefit flows over time.
In view of the short time span of the period subject to the analysis – in particular in the DRC where civil war had affected the period during which projects could be implemented – most of the project cases had not been completed/ commissioned. Thus the issues of impact and sustainability are based on the team’s preliminary assessment of the understanding of and the approach towards these issues.
The team experienced early during the study that the objective(s) to be met by the projects were not really of interest to the Chinese contractors of the projects. In selection of projects it was clear that in both the DRC and Zambia the intent of not interfering into a country’s internal affairs yielded a rather complete autonomy by the PRC to the African governments in the selection of projects.
This necessitates a strong and competent recipient, who has full understanding of the criteria and their coherence for the flow of MDGs -> National Strategic Development Plans -> Sector Plans -> Project Formulation -> Appraisal of project. The understanding of these interrelationships is fundamental to the effectiveness and the relevance of projects and, in the end, to the appropriateness of the impact.
15
In short, the main question is: does the project contribute to for example the MDG goal of poverty reduction and is the contribution comparatively better than other projects within this sector? From the perspective of the EU, the donor has a responsibility of monitoring this selection process at all stages to ensure the appropriateness of the selection and that the implementation is performed efficiently. This has also to do with the responsibility these donors have to shoulder regarding the way public money is being spent. However, the Chinese Government seems to hold a slightly different view on the responsibility for the social and environmental impacts of these projects and hold the local governments responsible. It is an interesting discussion about whether it is better, in the long term, for the DRC and Zambia if the local government is being held responsible for these impacts and therefore allowed to make mistakes and learn from them, or if donors should take this responsibility upon them.
3.2 Development Strategies and modalities
It is not possible to discuss impacts without knowing the purpose of the development project or at least the reason for the selection of the project. The research team discovered that the objectives and approaches to development were shaped by different strategies for development when comparing the OECD/DAC approach to that of Chinese development strategies.
Whereas the OECD/DAC approach broadly represents common development objectives agreed between the international donor community, and is based on many years of experience by a multitude of national and multilateral donors with implementation of development projects, Chinese foreign aid is governed by eight principles originally proposed by Zhou Enlai in 196416. These principles are briefly summarised below.
1. The Chinese Government always bases itself on the principle of equality and mutual benefit in providing aid to other countries. It never regards such aid as a kind of unilateral alms but as something mutual.
2. In providing aid to other countries, the Chinese Government strictly respects the sovereignty of the recipient countries, and never attaches any conditions or asks for any privileges.
3. China provides economic aid in the form of interest-free or low-interest loans and extends the time limit for repayment when necessary so as to lighten the burden of the recipient countries as far as possible.
4. In providing aid to other countries, the purpose of the Chinese Government is not to make the recipient countries dependent on China but to help them embark step by step on the road of self-reliance and independent economic development.
5. The Chinese Government tries its best to help the recipient countries build projects which require less investment while yielding quicker results, so that the recipient governments may increase their income and accumulate capital.
6. The Chinese Government provides the best-quality equipment and material of its own manufacture at international market prices. If the equipment and material provided by the Chinese Government are not up to the agreed specifications and quality, the Chinese Government undertakes to replace them.
7. In providing any technical assistance, the Chinese Government will see to it that the personnel of the recipient country fully master such technique.
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8. The experts dispatched by China to help in construction in the recipient countries will have the same standard of living as the experts of the recipient country. The Chinese experts are not allowed to make any special demands or enjoy any special amenities.
The eight principles for Chinese foreign aid have also been tested during a long period of time and have gained wide acceptance by the recipients of the African continent. The present Chinese interpretation of these principles constitutes a lean, efficient, pragmatic approach to development aid which does not lead to humiliating conditions, delays in project implementation or costly project solutions. Also the channelling of foreign aid through business ventures such as the Sicomines agreement confirms to the “recipient” that the venture is between two equal partners.
The CCS report Evaluating China’s FOCAC commitments to Africa and mapping the way ahead17, suggests that “a stronger FOCAC linkage with regional organisations, such as SADC, EAC, ECOWAS etcetera would produce a bigger impact on regional economic growth and development.” However, despite the fact that the Forum of China-Africa Cooperation (FOCAC) offers a multilateral platform, most of China-Africa relations are distinctly bilateral. This tendency towards bilateral relations seems to be embraced by both Chinese and African actors. Some states, such as South Africa have suggested a common approach to maximise Africa’s benefits, but most African states are actually satisfied with a bilateral interaction and the rewards which flow from this.
As suggested above in Chapter 3.1, the donors or governments providing development aid have a responsibility of knowing which intervention is being supported and how the intervention will affect the recipient. The use of the DAC/OECD project cycle and the tools supporting this approach will facilitate a conscious project design, appraisal and implementation. It is suggested that these elaborate tools may delay progress of project completion. However, the identification through this process of risks and possible controversial aspects to projects permit mitigation and avoidance of risks and thus efficiency in project implementation.
A simplified comparison by government agencies of the two approaches is indicated above in Chapter 2.2 under selection of projects.
3.3 Sustainability
In the Sicomines agreement related projects, the maintenance issue was apparently not considered. In a few projects the contract’s defects liability period was extended to 2 or 5 years. However, there was no assurance of maintenance capability and capacity for the projects beyond the contract period. It was stated by the Chinese partner that the Congolese were intelligent and that a maintenance organisation was in place, however, that funding was a serious problem. Mr. Nzau Nzau from ACGT explained that this Congolese maintenance organisation has been established because the WB, Trustfund and EU provided USD 150 million with the objective to open more roads after the war, however with many conditions connected to it. One of them was that the Congolese Government needed to provide money to keep the
17
CCS, (2010), “Evaluating China’s FOCAC commitments to Africa and mapping the way ahead.” Accessed on 25-08-2010 from
roads in good condition. The funding partners would only provide the money if the DRC made a new law which stated that the DRC needs to have money available for maintenance one year after a road is finished. The Congolese Government did what they were asked to do and they implemented this new law. They receive the required money from tax on gas: 1ct every litre. The maintenance company is young, but the road is in good condition. Mr. Nzau Nzau told the research team that the Congolese are very happy with this new law.
It would be obvious that a major expansion of road works would require a similar sector expansion of maintenance capacity for roads to avoid that some of the combined Chinese and international donor funded projects would not suffer from lack of maintenance. The capacity concerns planning, budgeting, programming, preparation and implementation of road maintenance work. A national maintenance programming should concern the entire road network and not solely Chinese or other projects. It could be argued that coordination between donors would therefore be required; however, the responsibility could also be given solely to the Congolese Government.
In the large Lubumbashi-Kasenga (Congolese-Zambian Border) road rehabilitation project (also a Sicomines agreement project), the defects liability period was extended to a 5-year period. However, no consideration was given to the subsequent sustainability. At the time of observation just before the start of the rainy season, the grass on the completed shoulders and some embankment erosion damages had been left unattended since the end of the former rainy season. A photo of the affected section is shown in figure 3. Figure 3: Lubumbashi-Kasenga (ZM Border), High grass on shoulders and embankment slopes
At the Chinese Embassy in Kinshasa, the maintenance problem was recognised, but considered minor due to the “intelligent Congolese people and adequate institutions”. It was, however, recognised that funds for maintenance were not available. This was contradicted by the ACGT (Program Sino-Congolese) which referred to an Act, passed in 2009, securing 1% of fuel sales to be dedicated to maintenance.
For the KNBE hydropower project, the contractor was confident about the maintenance capability and capacity available in the Zambian sector. The establishment of the Zambian KNBEPC Ltd may justify this
assumption. However, the sector is embarking on further expansion, e.g. the launching of the Kafue Lower Gorge project, which will necessitate further expansion of maintenance capacity. The KNBE is shown below in figure 4.
Figure 4: Kariba North Bank Extension project
Kariba South Bank (Zimbabwe)
Kariba North Bank Extension Project (Zambia) The maintenance requirement could be magnified by projects of poor design and low construction quality, and for projects for which environmental impact mitigation would not have been properly designed or executed. However, it was not apparent from the research team’s inspections that the projects were not of a good quality or that the environmental impact had not been considered adequately. However, the EU Delegation in Kinshasa did draw the team’s attention to one road project in the DRC implemented by a Chinese contractor which had failed. Failures occur also for projects funded by international donors and this example can hardly be seen as a trend for Chinese projects.
Too little is known by the research team about the project preparation for projects supported by Chinese funding. However, our understanding of the performance of environmental impact assessment (EIA) and social impact assessment (SIA) suggested that the assessments sometimes were performed and controlled by Congolese authorities and at other occasions were subject to the contractor's performance of surveys and compensation. Ideally the EIA and SIA should be performed subject to national Congolese environmental acts and guidelines by the consultant preparing the project design and documents.
3.4 Impact and effectiveness
The impact to the society was investigated with enquiries to a few people along some of the roads and to a journalist. The people along the road all said that the road project was a good project and had no complaints nor had heard about complaints about the project implementation. According to our Chinese informants, the Congolese people showed their appreciation for the Chinese efforts to reconstruct the country by waving and smiling to them and by offering the Chinese discounts. This appreciation was noted by the research team when we stopped alongside a newly constructed road to inspect the drainage and a group of Congolese teenagers stopped to watch, said some Chinese words and applauded. The journalist
found the projects to be of a high quality and good for the Congolese people, and had no complaints about the demolition of houses. Generally there had not been written any adverse articles in local newspapers on these projects. The one complaint heard, however, is that Chinese contracts are done by Chinese engineers and labourers whereas other donor projects are executed by Congolese engineers.
From the observations of the research team self it was noted that in Case 2 the project would eventually create a bottleneck to traffic at the junction linking the 8-lane project to the adjacent road network. Figure 5 and 6 below present the situation in a photo and a satellite image. Without a continuation, the 8-lane road project does not make sense and will hardly be effective.
Figure 5: End of Boulevard du 30. Juin project (Google image).
As to social and environmental impact assessment it was not clear to which extent the so-called environmental guidelines by the Chinese Export-Import Bank were applied. Rather it appeared that the EIA and SIA are left to the government agencies to study and to enforce the findings. In the few cases understood by the research team, the assessments were made by the government agencies based on surveys carried out by the Chinese Contractor and the SIA mitigation (compensation, resettlement), if any, is considered the duty of the executing agency. Basically, all contractors considered their duty to be the implementation of the contract only, as stated in the contract documents. They therefore had no opinion on neither social nor environmental issues.
The accusation by donors/public opinion of maximisation of input of Chinese labour rather than use of indigenous labour appeared unfair compared with the large number of local labour apparently employed on the Chinese contracts. Large numbers of local labourers are employed and trained for work as labourers, drivers and operators. However, only on one contract one Congolese was employed for managerial work. Women were not considered to be suitable for the hard manual work but were only applied for cleaning and cooking services. This also applied to the Chinese women working on the contracts.
The quality of the projects visited appeared to be of a reasonable high quality. There were no signs of incompetence or negligence, which is sometimes suspected by Western donors and competing companies. However, it was in some projects not quite clear to the team, how quality assurance was ascertained. There was no mistake of the fact that Chinese companies were in the business to expand their business internationally through these projects. However, in several projects the contracting companies already had project portfolios which would be the envy of western contractors. These contractors were also by the team considered to be competent.
In connection with the funding issue, it was discovered that it is very difficult to identify whether the funding is aid development or business. Perhaps the interviewed staffs of such companies were not at an appropriately high level to know or to reveal this. However, it appeared that several of the large contractors interviewed in fact are “forced” to contribute to the funding of the projects – to bridge flow of financing – by drawing on resources from their Head Office in the PRC. This compares with the reluctance of the World Bank (and probably other donors) in projects in the DRC to accept competition by State Owned Enterprises, because SOEs could always rely on supporting funding by their Ggovernment to cover losses. However, the major part of the projects investigated were bilateral projects making such issues irrelevant. The attitude from the Chinese contractors and the Embassy was that the contractors should make a successful implementation of the projects, and the financing issues appeared in most cases to be secondary to the implementation progress.
Generally there appeared to be a tendency to source managerial staff, plants and some materials from the PRC, whereas other materials and labour would be sourced locally or in cases of inadequacy in meeting specifications, regionally. The choice, where to source labour and materials from is based upon economic calculations and time efficiency.
3.5 Efficiency
Based on the data available it was not possible to get a clear picture of the efficiency of the case studies. Delays appeared to be unavoidable in a number of ongoing contracts. Project costs for the two major Congolese road rehabilitation projects suggest at USD 420,000 and USD 730,000 for the Nsele-Lufimi road and the Lubumbashi- Kasenga road (Lot 1) respectively a low cost for a project won in ICB and a high cost for a road under the Sicomines agreement.
Road projects under the Sicomines agreement do not appear to be subject to competitive bidding but appear to be given to subsidiaries of the Chinese partners of the Sicomines joint venture. The research team correspondingly assumes that the Zambian Kariba North Bank Extension project and the Kafue Lower Gorge project were not won in international competitive bidding which might have affected the eventual contract amount.
However, Mr. Kaleshi from UCOP was very positive about the efficiency of Chinese companies. He gave the research team two examples in which a Chinese company took over from other foreign companies when they had too many problems. His experience is that the Chinese contractors are very efficient and reliable. The EU Delegation in Kinshasa gave the research team an example of a street implemented by EU funding which was then, after a year, reconstructed for widening by Chinese funding. This suggests that strengthening of national planning as well as donor coordination might increase the efficiency of funding.
Conclusions of the Field Research
This field research provided the opportunity to compare the findings in academic literature on Chinese involvement in infrastructure development to what is actually happening in the field. The findings of this research provide a better insight in the way Chinese investments in infrastructure projects in Africa are structured, which Chinese actors are involved and what their tasks and responsibilities are. The situation was not ideal for finding out how the local community really thinks about the Chinese involvement, since the team was constantly travelling together with a Chinese assistant of one of the Chinese contractors. On the surface, the Congolese seem to be very content with the Chinese. Since the projects the research team visited are still under construction, the team was not able to measure the impacts on poverty reduction. However, the team could see the difference between parts of the roads that were not developed yet and the new roads and were impressed by the pace of the construction in combination with the quality of the roads as apparent from visual inspection only.
It is interesting that the meetings with the Chinese embassies and the EU delegations were perhaps the most yielding parts of our surveys, highlighting the misconceptions on both sides of modalities and intentions. The research team took the liberty to suggest cooperation between the donor community at large and the Chinese investors and to point at the responsibility of all donors/investors for monitoring the project selection and implementation process. Mr. Nzau Nzau from ACGT acknowledged the excellent qualities in the models of the EU and the PRC for their own specific benefits. According to him, the Chinese are very quick and the EU model has the stability of a good system and both models are very useful for the DRC. It is thereby important to keep this variability and not let these models merge into a new, shared model. The research team envisages, however, that in view of the growing proportion of non-OECD aid by not only the PRC, but also India, Brazil, and other emerging donors, an approximation between project cycles and tools for development projects would be desirable.
The conclusion of this study is that coordination in the overall selection of projects and individual implementation under uniform monitoring modalities would serve the development objectives and the effectiveness of projects to the recipient the most. To facilitate the mutual understanding of the project selection, preparation and implementation process it is recommended that communication between the Chinese and International donors is strengthened, and that a mutual project framework concept is developed.
Clearly, better communication between donors in the International donor community and the PRC would reduce suspicion and misconceptions. Furthermore as increasing volumes of FDI will come from emerging countries; the current patronizing role maintained by the Western donors will need to be reviewed in favour of a cooperation based on mutual respect. It would be interesting, and necessary, to open up the discussion about giving the responsibility to the Congolese Government or not (yet). This is currently an important point of disagreement between the EU/WB and the PRC. One thing that became clear during this field research and that gave the research team good hope for the future development of the DRC: the Congolese and Zambian Government are pro-active engaged with the Chinese investors. The Congolese do thereby not feel the need to choose between the “Western” or Chinese system of development
cooperation. For the time being, they prefer to have the option of using both systems and decide per situation which system is more suitable.
The findings of this research lead to the following recommendations to improve cooperation between the PRC, the more established donors, Chinese investments and the recipients.
