Chinese 'diplomacy' exposed

By John Grobler - Mail&Guardian (South Africa)
July 27, 2009

In yet another example of sharp Chinese diplomatic elbows in African business it has emerged that the China National Machinery & Equipment Import & Export Company (CMEC) tried to charge Namibia nearly four times the going rate for the installation of a rail link to the Angolan border town of Oshikango.

On Wednesday the chief of the Namibian Defence Force, General Martin Shalli, was suspended by President Hifikepunye Pohamba in connection with an alleged $250 000 (R1,9-million) kickback from a Chinese company.

Shalli is suspected of taking the bribe while serving as Namibia's high commissioner to Zambia, in return for facilitating an arms deal.

Documents obtained by the Mail & Guardian show that CMEC offered to complete the 60km link between Ondongwa and Oshikango for a whopping R1,063-billion.

Since 2005 it has cost about R900-million to complete the first 250km from Tsumeb to Ondangwa.

The new section was to be financed under a special $100-million "concessional loan" facility, offered by Hu Jintao, the Chinese president, during his visit to Namibia early last year. The same facility was to be used for a controversial industrial X-ray equipment deal that is now threatening to engulf Hu's son, Haifeng, as well.

In a memorandum to his seniors on April 19, Robert Kalomho, the acting railway director, pointed out that the Chinese offer was more than four times as much as a bid from a local company, partnering with Italian industrial giant Lucchini.

The Chinese wanted R290-million for the rails and R773-million for the installation, documents showed. By comparison, the competitors had offered to do the same job for a total of R250-million, Kalomho noted.

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