Changing the rules of engagement on infrastructure

"The city's plan is to have 2,100 km. I guess it still needs another 10 years to finish it," Sun says.

The company trains local workers during construction. Some excellent ones leave the company and start their own construction business. "This happens a lot in water drilling and asphalt pavement segments," Sun says.

To follow the government's policy, the company is subcontracting some of its construction projects to local companies.

Wind power is a new segment that the Chinese company is betting big on in Ethiopia. As a country located in the eastern highlands of Africa with an average altitude of more than 3,000 km, Ethiopia is one of those countries that are never short of wind. But very little of it has been put to commercial use.

The company has set up the first phase of a wind power project, 80 km south of Addis Ababa, with an installed capacity of 50 megawatts. The second stage of the project is under construction. When completed, it would generate more than 153 mW of power.

Unlike CGCOC, which is banking on diversification, the China Railway Engineering Corp is looking to leave a mark by creating a completely modern landscape for Addis Ababa.

In 2007, the Ethiopian government came up with a plan for a cross-shaped city transport system composed of two light train lines.

Although there were several big international bidders for the light train project, it was eventually awarded to China Railway Engineering Corp in September 2009. The Chinese company had already made a mark in Africa during the 1960s by building the Tanzania-Zambia Railway, a major symbol of China-Africa friendship.

"As far as I know, the city light train project in Ethiopia is the only project of such a kind that we are conducting in Africa," says Cai Qinghao, CREC project manager for the light train project.

Cai says that the company is also building roads and regular railways in Nigeria, Angola and Uganda, but none is as advanced as this project, which is more of an above ground version of city subway systems.

The designed length of the $475 million project is 31 km and construction has already started. The whole project is expected to be finished by 2015. When completed, the rail system is expected to reduce traffic congestion in Addis Ababa, a city with a population of nearly 3 million.

"The cross-shaped light railway system will help people to come in and go out of the city. It will also add a modern touch to the old city," Cai says, adding that some big Chinese cities such as Chongqing, Dalian and Shenyang all have similar city light train systems.

Cai, who has been in Africa for two years supervising the project, says the biggest difficulty he has encountered is lack of raw materials and industrial products. The rails, compartments, sleepers are all shipped from China by sea.

"Local manufacturing capability is low. We have to import virtually everything from China, including steel and machinery equipment," he says. "It increases costs and slows down the process. The only things that we get locally are food, cement and some stationery."

More than 400 Chinese managers and engineers work side-by-side with 3,000 local workers on the project. Locals working on the project consider it to be a good opportunity because the salary for a medium-level worker is about 2,000 to 3,000 birr ($100 to $150) a month, much better than opening a roadside shop selling daily necessities. "The project has also helped Ethiopia to have its own engineers and skilled workers," Cai says.