If China-led large-scale constructions have been marred with issues in Latin America, from environmental and social impacts to human rights violations and shoddy work, to only name a few, other China-funded infrastructure projects have faced years of delays, cancellations, or have just been left unfinished. These recurring concerns and criticisms are part of the Chinese Communist Party’s portfolio.
“In general, Chinese companies consistently fail to comply with contracts, which often ends up in reports with comments from the Comptroller’s Office and legal proceedings. This is because work oversight is weak, almost non-existent,” Arturo Torres Ramírez, director of investigative journalism outlet Código Vidrio, told Diálogo. “Because of these oversight deficiencies, Chinese companies use poor-quality materials and equipment and, in some cases, subcontract the work to companies that do not have good quality standards, in order to reduce costs.”
In Colombia, the construction of the first line of the Bogotá Metro, Metro Línea 1, by Chinese consortium APCA Transmimetro, consisting of China Harbour Engineering Company (CHEC) and Xian Rail Transportation Group Company Limited, faced significant delays. In 2023, the company was fined for failing to deliver preliminary studies and designs on time. The project is still only partially completed.
CHEC, a subsidiary of China Communications construction Company (CCCC), which the World Bank blacklisted back in 2009, is known for its poor performance worldwide, yet has many projects in Latin America, about half of which are uncompleted.
In Costa Rica, the project to expand National Route 32, which connects the capital San José with the Port of Limón and began in 2017 with an expected completion date of October 2020, remains unfinished, over budget, and plagued by design flaws. Back in the 2000s, CHEC also expressed its intention to invest in modernizing the Port of Ilo in Peru and building a double-track railway connecting it to Santa Cruz (Bolivia) and Mato Grosso (Brazil), with an estimated investment of $4 billion, the project has not progressed beyond preliminary studies.
“China is late to the internationalization of its companies compared to other countries such as Japan and Europe. At the beginning of this process, these companies had very little knowledge of legal issues, bidding processes, regulation, procurement, the environment, and labor,” Enrique Dussel Peters, coordinator of the China-Mexico Studies Center at the Faculty of Economics of the National Autonomous University of Mexico (UNAM), told Diálogo. Chinese companies are known to fail to adhere to international norms for environmental and human rights, leading to degradation and abuses.
Social impact
Most of the delayed or unfinished Chinese projects also have a strong social impact. In Peru, for example, the Nueva Rinconada sanitation project, led by China Machinery Engineering Corporation (CMEC) in the province of Lima, was launched in 2021 to improve access to drinking water and sewage systems. However, it has faced significant delays and financial problems. In February, local business owners protested for not receiving payment for service rendered related to the project. More than half a million residents continue to have problems with their drinking water supply.
The local population is quite often the victim of unfinished projects, such is also the case in Puno, on the border with Bolivia. In this Peruvian city, the construction of the Manuel Núñez Butrón Regional Hospital was awarded in 2022 to a consortium led by the Chinese companies Weihai Construction Group Company Limited and China Railway No. 10 Engineering Group Co. Ltd. The Puno regional government canceled the contract due to various irregularities detected during the bidding process and execution of the work.
“There is a deterioration in services for the community because the works remain unfinished,” says Ramírez. A clear example is the $40 million project by China CAMC Engineering Co Ltd to build 2,100 houses in Ecuador. “There were delays of more than two years in the delivery of the houses to the inhabitants of poor neighborhoods because the works stopped. The contract was financed with a loan from the China Development Bank.”
In northern Ecuador, in San Miguel de Urcuquí, Chinese companies Gezhouba and China National Electronics Import & Export Corporation (CEIEC) were contracted between 2013 and 2015 for approximately $233 million to develop key infrastructure in the City of Knowledge, which includes the Yachay Tech University. The idea was to create a hub for technological innovation and knowledge intensive businesses. However, several buildings were left unfinished or had structural flaws, affecting the university’s academic development. Despite having more than 1,000 students, the university faces limitations in classrooms, laboratories, and basic services.
Environmental impact
The environment is also paying the price for the work of Chinese companies. The Comptroller General of Peru has identified delays and irregularities in projects managed by Chinese companies, including China Railway 20 Bureau Group Corporation (CR20), a subsidiary of state-owned China Railway Construction Corporation (CRCC). A 2022 report noted that three road projects in the Peruvian highlands awarded to CR20 were experiencing delays and possible environmental damage due to lack of environmental certification and specific designs.
In Ancash department, in central Peru, a consortium made up of subsidiaries of China Railway Group Limited (CREC) was contracted in 2021 to carry out the improvement and maintenance of the Conchucos Longitudinal Highway. It abandoned the project in 2022 after completing only 20 kilometers.
The Coca-Codo Sinclair hydroelectric power plant in northeastern Ecuador is also only partially operational. According to Ecuadorian news site Primicias, construction flaws and natural hazards could paralyze its use. The Chinese state-owned company Sinohydro, which built it, has also been accused of corruption by the South American country’s authorities.
“Despite repeated allegations of corruption in several Chinese projects, only in this case has evidence of bribery been found. Cai Runguo is being prosecuted in the Sinohydro case, as he was China’s ambassador to Ecuador and then the company’s legal representative when the bribery scheme involving more than $76 million to build the project was set up,” Ramírez said. Runguo left Ecuador in 2016. “The Prosecutor’s Office made 10 criminal cooperation requests from China for him to give his statement. None have been answered.”
China’s stalled projects in Latin America not only raise socio-environmental red flags but also cast a shadow on the region’s economic stability, development trajectory, and its people’s well-being.
