China's $1.9bn Belt-and-Road Rail Project Goes Off Track
A planned light-railway system that was the most high-profile project in Kazakhstan of China’s Belt and Road infrastructure program has hit a wall.
China Development Bank halted lending last year after the collapse of the bank where funds it had provided were deposited. Kazakh officials now say they will have to borrow domestically to complete the work. A series of concrete columns snaking through the capital, Nur-Sultan, are the only visible evidence marking the route of the $1.9 billion railway project that was supposed to start operating in 2020.
China hasn’t said why it stopped funding the project.
“One factor” in China’s decision to halt lending is that $258 million of the $313 million it had provided hasn’t been spent on the project, the Nur-Sultan mayor’s office said in an emailed response to questions. China Development Bank had lent the money to Kazakhstan’s state-owned TOO Astana LRT, which hired a consortium of Chinese companies to carry out construction on the light-rail network.
Astana LRT deposited the funds in Bank of Astana but didn’t disburse them. Less than a month before the central bank revoked Bank of Astana’s license in September 2018, the liability for the deposit was transferred to the Finance Ministry’s Problem Loan Fund. China Development Bank stopped financing the project in October.
