To OBOR or not to OBOR

A grand summit is now on in China. Around 65 countries are participating in the One Belt One Road (ORBOR) meeting which envisages construction of international trunk passageways and an infrastructure network connecting all sub-regions in Asia, and between Asia, Europe and Africa.

There is big money promised for these projects - China has committed a total of about $100 billion to three new infrastructure funds: a $ 40 billion fund to the Central Asia-focused Silk Road Fund, a $ 50 billion fund to a new Asian Infrastructure Investment Bank (AIIB) and a $ 10 billion fund to the BRICS-led New Development Bank.

India, however, has opted out. It is anything but enthusiastic about the CPEC, a highway that cuts through territory that has been illegally occupied by Pakistan.

What does this mean to countries that are enthusiastically participating in OBOR? Perhaps they expect a windfall by way of investments and market access. Or perhaps they will take a closer look at countries that have already borrowed tons of money from China, and ten contemplate - like Sri Lanka - whether they did the right thing.

Sri Lanka is currently in $58.3 billion debt to foreign financiers, and 95.4% of all government revenue is currently going towards paying back its loans. Of this, about $8 billion is owed to China alone, of which $1.4 billion was borrowed by the Sri Lankan government for constructing the Hambantota port.

Since these investments are not bringing in revenue as projected during the - rather hasty and secretive - planning & approval, the state is handing over its assets to Chinese companies on long-term lease:

• 80% of its Hambantota port has been handed over for 99 years, to China Merchants Holdings.
• Colombo’s South Container Terminal is a 35-year Build-Operate-Transfer (BOT) arrangement with the same company
• IZP, a Chinese informational technology company, has been put forward as a potential purchaser of Mattala International Airport.

So is there a pattern here? Borrow on easy terms, belatedly discover that the revenue model was flawed, and grudgingly hand over your land and assets to the foreign lender?



--------------------------------------------
LINKS & REFERENCES


* (2017) ET - http://economictimes.indiatimes.com/news/international/world-news/obor-summit-in-china-know-what-it-is-and-why-india-is-not-attending/articleshow/58656653.cms

* (2017) IE - http://indianexpress.com/article/what-is/china-one-belt-one-road-project-obor-4653564/

* (2017) IE - Belt Road Initiative - http://indianexpress.com/article/explained/china-belt-and-road-initiative-in-giant-trade-belt-road-to-new-growth-rush-4651727/

* (2017) FT - One belt, one road and many questions -- https://www.ft.com/content/d5c54b8e-37d3-11e7-ac89-b01cc67cfeec

* (2017) - Bloomberg - https://www.bloomberg.com/view/articles/2017-05-17/can-china-afford-its-belt-and-road

* (2017) Wanda Bullish on India - http://m.indiatoday.in/story/china-one-belt-one-road-meet-india-boycott-wang-jianlin/1/955695.html

* (2017) Express edit - https://www.google.co.in/amp/indianexpress.com/article/opinion/editorials/after-the-no-show-india-china-one-belt-one-road/lite/

* (2017) The Guardian - https://www.theguardian.com/world/2017/may/15/eu-china-summit-bejing-xi-jinping-belt-and-road

* (2017) Dawn, Pakistan - CEPC for Pakistan - A Colonial Enterprise?  - https://www.dawn.com/news/1333244

* (2016) Wire -- https://thewire.in/40388/one-belt-one-road-shaping-connectivities-and-politics-in-the-21st-century/


Hanbantotta - China's own port in Sri Lanka

* (2017) Forbes - India Tells Sri Lanka: You Can Take Your Port And Shove It - https://www.forbes.com/sites/wadeshepard/2017/01/21/india-tells-sri-lanka-take-your-trincomalee-deep-sea-port-and-shove-it/#14a10f915f88

* (2016) Forbes -- https://www.forbes.com/sites/wadeshepard/2016/07/31/china-to-sri-lanka-we-want-our-money-not-your-empty-airport/#27d0ecb21beb

AASTHO & Institution Building

MoSRTH is making a serious effort to improve highways in India. Having had some success with the GQ, it now aims at introducing expressways linking important cities. As of now there are hardly any in the country. One links Ahmedabad - Baroda and another is the Mumbai-Pune Expressway. There is one coming up between Delhi and Gurgaon but this one is just a disconnected set of seven flyovers; it lacks the most basic characteristic of an expressway: access control.

But hey, we're on the learning curve and one agency that the experts look up to is AASTHO. An odd sounding acronym for Indian ears but it stands for the American Association of State Highway and Transportation Officials (AASHTO). It is a nonprofit, nonpartisan association whose primary goal is to foster development, operation, and maintenance of an integrated national transportation system.

Experts talk about AASTHO with a degree of reverence and awe; of how they have institutionalized continuous learning; of how they incorporate the latest developments in technology and accidents-data to create

Today I came across a sampler - – “Guide for Development of Rest Areas”.

Everything is measured and studied – safety, cost-benefit, motorist safety. First a Systems Analysis is used to determine existing and future needs of the overall system. This includes – traffic volume, annual usage survey data, spacing intervals.

Interesting tidbits:

• On rural inter-state highways, absence of rest areas results in 52% increase in shoulder-related accidents
• Reduction in drive fatigue accident rates due to the rest area is 3.7%
• Well designed, well maintained rest areas create a positive image for state motorists; enhance quality of life for residents; promote tourism;
• USC 111 prohibits commercial information at travel info centers or rest areas
• Spacing between stopping opportunities – 100km (60mi) or one hour
• Exterior lighting – affects physical safety, loitering / criminal activity, “inadquate lighting makes travelers feel unsafe when stopping. Characteristics of major options –
• Mercury vapour – blue-green light; fair color; poor cost efficiency
• Metal halide – white; good color; moderate efficienc
• High-pressure sodium – yellow; poor color; good efficiency
• Low-pressure sodium – yellow; very poor color; very cost efficient

When will IRC grow up to become an AASTHO?