India Ups the Game by Fulfilling Promises in Delivering Infra Projects in Partner Countries

New Delhi: India has fulfilled its promise of reviving a textile factory in Kenya in a record time of less than three years, under a line of credit extended during Prime Minister Narendra Modi’s visit in 2016.

This is in sharp contrast to the days when the country was seen to be slow in delivering on its development partnership commitments especially in comparison with strategic rival China.

The development partnership between India and Kenya is also significant as it comes amid murmurs of protest on the African continent over China’s terms of engagement with countries while extending loans for infrastructure projects.

The Rift Valley Textiles factory in Kenya was shut down in 2000. India extended a line of credit worth $29.95 million during Modi’s visit to revive and modernize the factory. The contract to upgrade the factory was awarded to an Indian private company, Lakshmi Machine Works Ltd (LMW), which completed the project in June.

The renovated factory was inaugurated in the third week of June by Kenyan President Uhuru Kenyatta in the presence of Indian high commissioner to Kenya Rahul Chhabra, two people familiar with the developments said.

The factory now has a cotton processing capacity of 83 bales a day, up from 8 bales a day previously. It has an output capacity of 15 million metres per annum, up from 1.7 million metres per annum, said one of the people mentioned above.

“LMW has also provided training to technicians, operators and trainers in India as well as in house (at the factory in Kenya). The modernization of the factory is expected to revive the textile industry of Kenya and when the factory becomes fully operational the direct and indirect impact of the factory revival will be enormous. This will range from direct employment to growth in incomes of cotton growers in 22 counties, along with the strengthening of forward and backward linkages,” said one of the people mentioned above.

India had also promised to renovate the Mahatma Gandhi Graduate Library at the University of Nairobi through a grant of $1 million. This too has been completed on time, said government officials. “These projects are an example of how Indian assistance is making a difference to the economy and lives of people in African countries. The speed of our project delivery has also been appreciated,” said T.S. Tirumurthy, secretary, economic relations, in the Indian foreign ministry.

Some of the big-ticket projects completed by India recently in Africa include the construction of the presidential office in Ghana, the National Assembly building in Gambia, and the Kosti power plant in Sudan. Africa is a key development partner of India garnering a sizeable portion of India’s lines of credit assistance of $28 billion extended in 2018-19.

Foreign minister Subrahmanyam Jaishankar, in one of his first public statements after taking office in May, said that project delivery would be a key focus area.

At an event in New Delhi, Jaishankar said he would hold monthly reviews of India’s development projects to ensure their timely delivery. In the past, there have been complaints of time and cost overruns, giving India the reputation of being a well meaning partner but whose efficiency in delivering on time is questionable.

India upping its game comes against the backdrop of China emerging as the single largest financier of African infrastructure, financing one in five projects and constructing one in three, according to a paper by Deloitte Africa dated March 2019.

“To date China has participated in more than 200 African infrastructure projects. Chinese enterprises have completed and are building projects that are designed to help add to or upgrade about 30,000 km of highways, 2,000 km of railways, 85 million tonnes per year of port throughput capacity, more than nine million tonnes per day of clean water treatment capacity, about 20,000MW of power generation capacity, and more than 30,000km of transmission and transformation lines,” Deloitte Africa said.

However, there has been some backlash against China in Africa with Britain’s Telegraph news paper reporting that Tanzania had suspended a port project and Kenya halted construction on a coal power plant.

The port in the Tanzanian town of Bagamoyo was worth $10bn and would have been the largest in east Africa. However, financing terms presented by the Chinese were “exploitative and awkward”, John Magufuli, Tanzania’s President, was quoted as saying by the Telegraph.

Analysts say that while India has a long way to go in catching up with China vis a vis undertaking big ticket infrastructure projects, there is some realisation in Africa that Beijing’s terms of engagement are maybe less than desirable and this could present India with an opportunity to take on more projects in Africa .

Source: LM

Image Courtesy: Wikimedia