Wellington –Masiaka Highway, one of Sierra Leone’s most strategic national assets, is nearing the final stages of reconstruction. The highway became the country’s first toll road, operated by Chinese state-owned company, China Railway Seventh Group (CRSG), which has a 27 year concession agreement with the government of Sierra Leone.
This means that for the next 27, every Sierra Leonean wishing to use the road, must pay a fee directly to CRSG or be denied access.
“Wellington-Masiaka links the country with the capital city. Foods and services, produce, are channeled through that route. If you arrest the Wellington-Masiaka road, you arrest the rest of the country,” explained Andrew Lavali, Executive Director of the Institute for Governance Reform (IGR).
The 62-kilometre highway project was granted by the government of Sierra Leone to the China Railway Seventh Group under a Finance, Design, Build, Operate, and Transfer (FDBOT) agreement in April 2016. The Chinese constructor is in charge of financing, building, and operating the highway until it recovers its investment and profits. Only after that, the highway is transferred back under the full ownership of Sierra Leone.
“What if we cannot pay?”
According to Peter S. Kome, Sierra Leone Road Authority (SLRA) Project Manager for the Wellington Masiaka Toll Road, the project is the first Public-Private Partnership road in the country. The highway is nine meters wide each way, and it costs between $1.4 million to $3.6 million dollars per kilometre, according to Kome. Good roads, Kome said, are good for the maintenance of private vehicles too. They also help reduce the number of car accidents and, subsequently, the number of fatalities. “One of the biggest things we do as we build roads is to make roads as safe as possible,” Kome said.
A recent survey published by the IGR on February 27, found that about 7 in every 10 residents (68.7%) in communities in Regent and Grafton area where China is constructing the four lane road linking Freetown and Western Rural Districts reported that livelihood, including business activities tied to transportation, has improved as a result of the construction work.
But Andrew Lavali said that there was a silver lining there. The price tag for one kilometre of road seems too high, even by the European Union standards. “It means that each kilometre of that road costs 3 million dollars. What if we cannot pay, does that mean that a strategic national asset would belong to a foreign country?”
He added that Sierra Leoneans are kept in the dark on how much CRSG collects on a daily basis from road users, but also have no information on the structural repayment plan of the road, or conversations on possible early loan repayment. And this is a problem, he said, if we look into the recent history of the same deals China did in other countries.
For example, in December 2017, Sri Lanka lost its Hambantota port to China for a lease of 99 years after failing to consistently pay off billions of dollars in loans. The transfer, according to the New York Times, gave China control of the territory right next to rival India. It is a strategic position along a critical commercial and military waterway. “The case is one of the examples of China’s ambitious use of loans and aid to gain influence around the world and of its willingness to play hardball to collect,” says the New York Times of December 12, 2017.
In September 2018, Zambia also risked losing the Kenneth Kaunda International Airport to China over debt repayment, and the fate of the airport is still not yet resolved.
China’s lending to countries in Africa was $152 billion between 2000 and 2018, according to the South China Morning Post, most of it spent on Belt and Road Initiative projects.
“It’s become known as ‘debt-trap diplomacy,’ where a country loans money with the intention of political or economic concessions if the loan cannot be repaid,” Newsweek reports.
The need for transparency
Peter S. Kome of SLRA explained that the current financing plan was chosen carefully in order to avoid committing the government to expenses that would take away from other programs, such as education.
“Traditionally, what happens is that the government takes taxpayers’ money to build a road. When the government take money from the [budget] to build a road, that money is not available for any other government project, like education, health, social welfare, and so on.”
This is where the private companies step in, put in the money and the work, and recover their investments from the exploitation of the construction. In this case, the Chinese company is collecting tolls (also known as fees) from anyone wishing to use the road in order to recover its investment, losses and profits.
But Andrew Lavali said that Sierra Leoneans must be fully informed about the current status of the contract between the government of Sierra Leone and CRSG, because the people are paying for it. Moreover, Lavali said, there are significant sovereignty implications for strategic investments in areas like ports, airports, and roads and the best thing a country can do is to ensure that the conversations are open and transparent for the public.
In October 2018, the former US Vice President Pence said that “China uses so-called debt diplomacy to expand its influence. The terms of [its] loans are opaque at best, and the benefits invariably flow overwhelmingly to Beijing.” He added: “Just ask Sri Lanka, which took on a massive debt to let Chinese state companies build a port of questionable commercial value. It may soon become a forward military base for China’s growing blue-water navy,” Pence said, while addressing the Hudson Institute, a think tank in Washington D.C.
How much will Sierra Leone pay, for how long?
At this time, there is no understanding for how many years will China control the Wellington Masiaka road. Initially, the concession was supposed to be for 25 years.
The initial proposed amounts required that taxis would pay Le. 3,000, minibuses Le. 5,000, medium-sized buses Le. 10,000, medium-sized trucks Le. 50,000, heavy trucks Le. 400,000, and tractors and trailers Le. 500,000.
But following protests, the fees were lowered to Le. 2,000 for taxi, Le. 4,000 for a minibus and jeep, Le. 18,000 for light truck and Le. 183,000 for a heavy truck. Based on this reviewed price list, the contract was revised to 27 years of concession, during which the Chinese company is expected to collect tolls and recover its investment with interest, and profits.
The cost: 16,000 dollars a day, each day, for 27 years or more
Data from the Sierra Leone Road Safety Authority (SLRSA) shows that by the end of 2019, Sierra Leone had almost 80,000 registered and renewed vehicles nationally. If each of the registered vehicles were to use the Wellington-Masiaka road once every day
and pay a flat rate of Le. 2,000, CRSG would be able to recover their investment in 27 years. This does not include interest, profits, losses due to inflation, and other costs which are not known to the public.
CRSG needs to collect at least $5,703,000 dollars every year, or $475,308 dollars every month, or $15,843 dollars every day for 27 years to recover the amount it invested. But these numbers are amateur estimates, because the government and CRSG refuse to make the data public.
Awoko newspaper submitted a Right to Access Information to the CRSG on February 11, which remained unanswered by the time of this publication.
“Sierra Leoneans should be concerned. Conversation about the national assets is restricted. Nobody knows when the politicians are having conversations with the Chinese on vital assets. And what are the implications for democracy building? Because China is not a democracy, China is a totalitarian state.”
“It is more than just a road. In terms of massive invasion, no foreign governments has ever invaded Sierra Leone like China,” Lavali argued, and suggested that ECOWAS must develop a standard for engagement with China to ensure their interests and sovereignty are protected.
