China and South Africa have agreed in principle to build a rail network and infrastructure projects in Africa.
South Africa’s Standard Bank Group said on Tuesday it has signed memorandum of understanding with China Railway Group to cooperate on funding for rail and infrastructure projects in Africa. Bloomberg News reported earlier on Tuesday that China Railway is in talks with South Africa’s government to build a $30 billion high-speed rail network, citing the chairman of the firm.
South African President Jacob Zuma and a delegation of more than 370 business representatives are on a three-day trip to China, to encourage more investment in Africa’s biggest economy.
South Africa is looking for expanded trade and investment to meet its development needs by improving roads, communications and power and by generating more manufacturing jobs, Zuma told a forum of executives from the two countries.
Standard Bank, which is 20 percent owned by Industrial and Commercial Bank of China, said in an e-mailed statement the agreement “does not relate to any specific project at present”.
The talks between China Railway and the South African government are at an early stage and no funding is in place, Li Changjin said at a forum in Beijing, according to Bloomberg.
Ahead of the 2010 soccer World Cup, South Africa launched the initial phase of the continent’s first high-speed urban train, which cost 24 billion rand.
South Africa’s transport minister Sibusiso Ndebele in April proposed the construction of a multibillion-rand high-speed train network linking Johannesburg and the city of Durban.
Ndebele said at the time he would ask the cabinet in this financial year to approve a feasibility study.
South Africa wants Chinese banks to help fund the project and China Railway wants South Africa to contribute up to 40 percent of the capital, Li told Bloomberg.