China-Driven Rail Development: Lessons from Kenya and Indonesia

The briefing analyzes the Standard Gauge Railway (SGR) in Kenya and the Jakarta-Bandung High Speed Rail (HSR) in Indonesia, finding that both projects suffered from poor environmental mitigation, problematic land acquisition, and governance failures. It argues that weak recipient institutions in the Global South compound the reputational and material risks for Chinese contractors.

• The Standard Gauge Railway (SGR) in Kenya faced significant environmental controversy because its route passed through Nairobi National Park. While the contractor, China Road and Bridge Corporation (CRBC), implemented animal-friendly designs and watering points, reports indicate the railway still negatively impacted wildlife migration.
• Governance and financial sustainability issues plagued Kenya's SGR, including allegations that President Uhuru Kenyatta bypassed regulations to fast-track the project for elections. The project contributed to a massive increase in Kenya's debt to China, rising from $756 million in 2014 to $6.47 billion in 2019, and accumulated operating losses of approximately $200 million by mid-2020.
• The Jakarta-Bandung High Speed Rail (HSR) in Indonesia has been marked by severe cost overruns of nearly $2 billion and significant delays. The project's total cost is estimated between $6 billion and $8 billion, leading President Joko Widodo to issue a decree in September 2021 allowing the use of state funds, which contradicted the original business-to-business agreement intended to avoid sovereign guarantees.
• Environmental and social management of the Jakarta-Bandung HSR was poor, with allegations of inadequate community consultation and flawed impact assessments. This resulted in construction debris clogging drainage canals and causing flooding, as well as the loss of farmland and risks of landslides.
• In both Kenya and Indonesia, land acquisition was a primary source of delay and corruption. In Kenya, the process was marred by elite manipulation and patronage; in Indonesia, it involved opportunistic demands from local officials and resistance from the Indonesian Air Force.

APA

OTELE, O. M., LIM, G., & ALVES, A. (2022). China-Driven Rail Development: Lessons from Kenya and Indonesia. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2022/01/Policy-Insights-121-otele-lim-alves.pdf

Chicago

OTELE, OSCAR M, GUANIE LIM, and ANA ALVES. China-Driven Rail Development: Lessons from Kenya and Indonesia. South African Institute of International Affairs, 2022. https://saiia.org.za/wp-content/uploads/2022/01/Policy-Insights-121-otele-lim-alves.pdf.

Wikipedia

{{cite report |last1=OTELE |first1=OSCAR M |last2=LIM |first2=GUANIE |last3=ALVES |first3=ANA |title=China-Driven Rail Development: Lessons from Kenya and Indonesia |publisher=South African Institute of International Affairs |date=January 2022 |url=https://saiia.org.za/wp-content/uploads/2022/01/Policy-Insights-121-otele-lim-alves.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{otele2022chinadriven, author = {OTELE, OSCAR M and LIM, GUANIE and ALVES, ANA}, title = {{China-Driven Rail Development: Lessons from Kenya and Indonesia}}, institution = {South African Institute of International Affairs}, year = {2022}, month = jan, url = {https://saiia.org.za/wp-content/uploads/2022/01/Policy-Insights-121-otele-lim-alves.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }