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China, The Silent Conductor In Latin America's Big Rail Projects

China's global investment tentacles have reached South American railways, where Chinese firms are "silent" partners in expanding rail networks, through financing or sale of rolling stock.

Photo of a train car lifted by a crane

Workers in China load a metro train car that is to be shipped to Brazil

Gwendolyn Ledger

SANTIAGO — From public mistrust of its goals to suspicions of its ties to corruption rackets, Chinese investment in Latin America's railway sector has gotten off to a shaky start. Over the past decade, the Asian superpower may have suffered from its unfamiliarity with regional and domestic policies, but it's going full steam ahead on investment in an industry where there is much to gain, but also much to risk.

Francisco Urdinez, a politics professor at the Catholic University of Chile, cites the aborted Mexico City to Querétaro railway project as a cautionary tale: The deal was canceled for corruption, and public opinion singled out the Chinese firm in the scandal, even though it was part of a multi-company consortium.

"I think the reputational harm ends up being greater than the project's potential benefits," says Urdinez. "Chinese firms have more to lose than win out of uncertainties around the risks of domestic corruption here in Latin America."

Chinese businesses have learned from experience and are now focusing on smaller and less ambitious proposals than the megaprojects of the 2010s.

Partnership over monopoly 

Diego Leiva, a Ph.D. student at Australia's Griffith University, says, "I think they're starting to learn quite a bit and starting to have more success."

Leiva points out that Chinese investments abroad are changing as they have grown at a slower rate, lost money and experienced problems in their own economy. He says that authorities are asking firms to be more considerate of risks before investing. For example, they "won't do the entire project anymore, but come in, let's say, through procurement — selling train cars, assorted inputs — but without necessarily participating in construction from the start."

Leiva says this has proved to be the right recipe, even in problematic markets.

China could also supply electric coaches for city railways

In May 2021, the Chinese were successful bidders to build the first leg of the Mayan Train project from Palenque to Escárcega, in the eastern state of Campeche. Their proposal amounted to $781 million and was put together as part of a consortium. This consisted of the China Communications Construction Company (CCCC), Mota-Engil in Mexico and three Mexican firms: Eyasa, Grupo COSH and Gavil Ingeniería.

In Brazil, they are processing the Ferrogrão project (also known as the EF-170 railway), designed to link the Mato Grosso state with the northern state of Pará. Another Brazilian project is the Pará railway, a joint enterprise between CCCC and Vale mining. In its first phase, the railway is set to link the city of Marabá with the port of Barcarena over 500 kilometers.

Construction is planned to start in 2021 with a budget of $1.3 billion. Once complete, the railway will be used to carry iron ore from the Carajás complex, the world's biggest iron ore mine. In a second phase, the railway will extend southward toward Santana de Araguaia, to incorporate meat and grain transportation.

photo of a boy asleep inside a train

A passenger naps on a train in Aguascalientes, Peru

Tim Johnson/TNS/ZUMA

Chile on rails 

In Argentina, one of the most recent agreements was in April 2019, when CRRC Qingdao Sifang, a rail construction firm, signed a $287 million deal (financed by the China Development Bank) with the Argentine transport ministry to supply 200 train cars for the General Roca metro line in Buenos Aires. In Colombia, a consortium led by China Harbour will build the first line of the Bogotá metro, covering over 20 kilometers. The consortium will also build the Regiotram de Occidente, a suburban line designed to transport 130,000 commuters daily between Bogotá and the Cundinamarca department.

In Chile, EFE Trenes de Chile, the former state railway, has bought 21 Chinese motor-coach trains for various services in central and south-central Chile. CRRC Sifang has also successfully bid to supply rolling stock for new long-distance trains set to link Santiago and Chillán (400 km) in just three hours and 40 minutes.

These are part of the Chile on Rails (Chile Sobre Rieles) plan that would increase train use from 50 million to 150 million passengers a year by 2027 and envisions big investments in a range of new services and infrastructure. Chile wants to grow its trains from 58 working units in 2019 to 156 in 2027.

Cutting competition, curbing pollution

There is "an important space for Chinese firms to participate in future tenders for rolling stock," says Franco Basso, an expert in transport systems at the Pontifical Catholic University of Valparaíso. This, he says, could increase competition and lower prices, adding the Chinese could also supply electric coaches for city railways, contributing to moves to decrease pollution levels in cities.

Urdinez of the Catholic University of Chile, largely concurs: "It is a very cheap and non-polluting way of transporting goods and people, but its disadvantage is its very costly maintenance and installation."

He also highlights that the problem in Latin America is low population density, which makes railways less profitable than in densely populated zones like Europe. Although, he's also looking to the future: "As oil becomes scarce and costly and we have to cut carbon emissions, then moving toward an infrastructure system with a bigger share of railways will be crucial."

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The Unsustainable Future Of Fish Farming — On Vivid Display In Turkish Waters

Currently, 60% of Turkey's fish currently comes from cultivation, also known as fish farming, compared to just 10% two decades ago. The short-sightedness of this shift risks eliminating fishing output from both the farms and the open seas along Turkey's 5,200 miles of coastline.

Photograph of two fishermen throwing a net into the Tigris river in Turkey.

Traditional fishermen on the Tigris river, Turkey.

Dûrzan Cîrano/Wikimeidia
İrfan Donat

ISTANBUL — Turkey's annual fish production includes 515,000 tons from cultivation and 335,000 tons came from fishing in open waters. In other words, 60% of Turkey's fish currently comes from cultivation, also known as fish farming.

It's a radical shift from just 20 years ago when some 600,000 tons, or 90% of the total output, came from fishing. Now, researchers are warning the current system dominated by fish farming is ultimately unsustainable in the country with 8,333 kilometers (5,177 miles) long.

Professor Mustafa Sarı from the Maritime Studies Faculty of Bandırma 17 Eylül University believes urgent action is needed: “Why were we getting 600,000 tons of fish from the seas in the 2000’s and only 300,000 now? Where did the other 300,000 tons of fish go?”

Professor Sarı is challenging the argument from certain sectors of the industry that cultivation is the more sustainable approach. “Now we are feeding the fish that we cultivate at the farms with the fish that we catch from nature," he explained. "The fish types that we cultivate at the farms are sea bass, sea bram, trout and salmon, which are fed with artificial feed produced at fish-feed factories. All of these fish-feeds must have a significant amount of fish flour and fish oil in them.”

That fish flour and fish oil inevitably must come from the sea. "We have to get them from natural sources. We need to catch 5.7 kilogram of fish from the seas in order to cultivate a sea bream of 1 kg," Sarı said. "Therefore, we are feeding the fish to the fish. We cannot cultivate fish at the farms if the fish in nature becomes extinct. The natural fish need to be protected. The consequences would be severe if the current policy is continued.”

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