Wednesday, April 2, 2014

Chinese-Built Angolan "Ghost Town" Wakes Up?

Kilamba, c. 2012
Anyone who has been to Luanda knows that the city lacks housing. The hotels are extremely expensive, and researchers have been known to rent a room in someone's house for $100 a day. Angolan president Jose dos Santos pledged to build a million new homes, between 2008 and 2012. Kilamba City was part of that promise. The idea of constructing a new town, Kilamba City, 20 km outside Luanda, where flats would be available for purchase, seemed like a good one.

A Frenchman, Pierre Falcon, the famous architect of the "Angola-gate" arms trade and corruption scandal, owns the company that oversaw the project: Pierson Capital GroupThe complex was financed by ICBC, Industrial and Commercial Bank of China, allegedly backed by oil-revenues. CITIC built the flats. The state-owned oil Angola was in charge of marketing the apartments (they would use those revenues to repay the loan). Chinese firms built Kilamba. And then the apartments seemed to stand empty. Visiting Western journalists photographed the long, lonely expanses of buildings. Kilamba City was filled, it seemed, by ghosts.
Kilamba: credit Voice of America

Until recently. Or so it seems. According to the official Angolan news agency, some 40,000 people moved into Kilamba after their families took advantage of long-term, low-cost mortgages to buy flats with prices ranging from US$70,000 to US$140,000. One account said people are standing in line for days to buy one (photo left).
The news stories on Kilamba, the "ghost town" mainly date from 2012. If it is actually now becoming a thriving town, why hasn't anyone gone back to report on it?

Readers: have you seen Kilamba? Your comments and stories are very welcome.

Update May 6, 2014: New SAIIA analysis exactly on this topic, by David Benazeraf and Ana Alves, "Oil for Housing: Chinese-Built New Towns in Angola." Highly recommended. 

17 comments:

  1. Hi Deborah,

    I think this story moved on from being about the Chinese quite a long time ago, to being about the incompetencies of the Angolan government and how it made such a bungle of the allocation of the properties.

    Some people had to wait over a year to get keys for apartments they paid for, others found apts they had bought had been simultaneously sold to other people.

    Now in 2014, there are indeed many people living Kilamba, but there, and in other similar developments, the issue is that basics like running water and electricity remain elusive. I saw pictures just last week of women queuing with buckets at communal taps.

    Several journalists have continued to report on the trials and tribulations of Kilamba, though mostly in Portuguese, so perhaps the stories have not been seen as widely as the early pieces with the "ghost town" headlines.

    It is interesting to note that in recent months the Gov of Angola has announced several new housing developments with CITIC (or at least officially announced them, building likely began a while ago).

    They have also said they will "learn from mistakes" of Kilamba… We will have to wait and see how the properties are managed and if the new developments have more integrated services.

    SONIP is now in charge of these estates, not central government, and just last month an IMF report noted that SONIP was funding the new developments via QFA and thus it's extremely hard do know what is really being spent as it doesn't show up in the main budget.

    We also don't know what part CIF really played, though we do know after some dormant years, they are very active elsewhere in the country, building the new airport, running cement plants etc.

    In the case of Kilamba… was it good value for money? How much did CITIC make out of the contract? We will probably never know…

    Some other unknowns are..
    Will the properties be worth anything in 10 years time? Will the big visions for out of town development come together and make these remote urban jungles pleasant places to live in?

    So, to reiterate the point I tried to make in several stories that I did after my initial bbc "ghost town" story… yes, there are questions about the application of chinese labour and building style… but really the main issue, for me -- and maybe others disagree - is how the Angolan government managed / mis-managed Kilamba.

    Happy to continue talking about this!

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    1. There is a lot of truth to what you are saying. The units were priced too high in the first place for the locals and there was not any financing available or financing put in place for these apartments and a person did not have an option to rent, you could only buy.(In America we would call it a condo.) This is what created the ghost town, China had nothing to do with that part, China did its job and did it well, it was the Angolan government that botched this in the beginning. By the time the Government decided to fix their mistake, the western media had already jumped on the story looking for bad news about Africa and China doing business, of course exaggerating the situation by predicting Kilamba would become wasteland.

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    2. I should have read this more closely, you are Ms Redvers from a Western media outlet. Your obsession with believing or trying to prove that Angola got the worse end of the deal is quite interesting. You must be related to Rafael Marques de Morais. He has an extreme bias against anything and everything the Angolan Government does. This is the genius who said China is colonizing Angola. Did it ever occur to you that Angola may have gotten the better of the deal? Oh but that wouldn't be the news story you or your colleagues want to hear. I would have to disagree that people have moved on and are now talking about the Government was incompetent in the beginning. Yes the Government messed up but later fixed the problem. I know numerous people who still think Kilamba is a ghost town in the English speaking press. Your report gave the impression that it will ALWAYS be a ghost town and it was no way possible to fix the problem. In your original report you mentioned people living off less than 2 dollars a day, which is a very popular quote in the western press about any country in Africa. But what you do not understand is these apartments were meant for the city dwellers, not the people who live in the country side. There are plenty of locals in the cities who make a lot more than 2 dollars a day and there are plenty of them in Luanda. Not one western media outlet did a follow up saying it was no longer a ghost town. Now your focus is on hoping that Kilamba has a problem with running water and electrical and to follow that possible story. I was in Kilamba I do not recall anyone having problems with plumbing or electrical. But I guess all you need is one apartment with problems to do your story, and simply exaggerate the number.

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    3. Ms Redvers you stated

      "Some other unknowns are..
      Will the properties be worth anything in 10 years time?"

      Now why is this a concern as long as the economy keeps growing and the middle class keeps growing along with the population of greater Luanda keeps growing the apartments should be worth something in 10 years. Now the apartments will not be worth anything if there is a complete government collapse because of another civil war, because the western press got the locals thinking the government is keeping them from being rich. So if another civil war breaks out as a result of all of this negative press on Angola that do not tell the whole story, then the apartments will not be worth hardly anything.

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    4. Ms. Redvers in reality there is a lot the Government has done right but there are some things they got wrong, which is similar to your reporting. Your reporting makes the situation seem a lot worse than what it really is because sometimes things are slow to get off the ground when people are working together on a major project for the first time. You quoted Rafael Morais on an unproven accusation as though there was strong evidence to back it up. After getting more credible information about the situation in Kilambi, I am concluding in the long run the housing in Kilamba and elsewhere around Luanda will be just fine. The biggest part was to get the apartments built in the first place which was done. Now there were some "hiccups" in hiring the wrong private company to manage the property but that can be fixed, once people become more experience in this. You write as though the problem cannot be corrected. You write stories of "gloom and doom" forever and forever. You quote the average income of people living in the country side which is irrelevant to the story instead of the average income of people living in the city. You completely failed to mention that there is a growing middle class. You complain about capital having a small millionaire elite, but millionaires create jobs. In reality the Government has done a lot in a short period of time. When going from a war economy to a peace time economy, there are going to be growing pains. You talk about there not being any Angolans hired in the building of Kilamba. If you did your home work you would have realized there was shortage of experience construction workers in the beginning because of the long 27 year war. But as time past, more and more Angolans are on construction sites in the city and around the country. Another problem with you is that you write quoting only one local independent person, but he has a long track record of being against anything and everything the Government says or does. He cleverly mixes facts and fiction to make it look like he's this great reporter under covering corruption. You need to get the other side of the story from non bias locals. The Government was dealing with a war that lasted 27 years from an enemy that is tribalistic and desperately was trying to overthrow the Government. A lot of the country resources went to the war effort instead of housing. The war kept the Government from doing a lot of good with the oil money coming in. This organization that was trying for 27 years to over throw the Government were mostly funded by blood diamonds and a western donor nations. Now this tribalistic organization is the main opposition party. It takes a while to rebuild a country after a war that occurred for that long. I think your style of reporting is mostly looking for dirt. That plays into the hands of a tribalistic opposition party that means no good any of the people. You got to realize what the alternative is to the present Government and in that part of the world its a good chance it will be a million times worse than the present Government. As imperfect this Government is they have spent a lot to rebuild a country.

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  2. Thanks for the update Louise. This seems a common pattern, of a division of labor where the host government agrees to do X for a Chinese construction project or investment but fails to carry it out. I have seen this most often with resettlement and compensation, and site services, including access roads, water and electricity. I wonder if the Chinese financiers will ever wake up, as the World Bank eventually did, to the reputational risks inherent in this "non-interference approach"?

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  3. its kind of similar to the chinese financed university in Malawi that couldnt open because of no library books, and other such facilities. Seems from the reports that the Malawi gvt did not negotiate well- apparently the delegation negotiating the deal did not comprise of academic administrators (who seemed bitter about being denied the opportunity to travel from the tone of the article). as per usual, it was an isolated report in a malawian newspaper and the story has since died down.

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  4. Thanks again Louise for updating us. It would be great to have links to more recent stories on this -- I couldn't find much. And @CPTWIL Alon, thanks for your inputs -- let's take the high road in the discussion. Has anyone been to this project recently? Would be great to have some updated photos.

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  5. Here is a video of someone driving around Kilamba very recent. It doesn't give you the exact occupancy but you can clearly see the buildings have people living in them by the number of cars parked outside and number of air conditions sticking outside of those buildings.

    Tom

    http://www.youtube.com/watch?v=I5-jxYncrTI


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  6. Hi guys!

    It is very interesting that I find this post today. I am actually currently working on a report about the Kilamba's project for the University Sorbonne, in Paris.
    The aim of it is to prove that all the arguments of the western press about Kilamba as a new "white elephant" were not founded because they were too quickly made.

    I, now, want to show how the chinese have entered in competition against the western world for what is about the development ground.

    In order to do so, I wanted to use the example of Kilamba as a typical solution for many situations in Africa and other parts in the world.

    This report that I am writing would be sent to one of the most important development faculty in France to serve as an example of development.

    I would need a few information about it though...

    For example I would like to know what are the sizes of the apartments.

    Is it really inhabited? Or is it just bought in order to do some private speculation on the real estate over there?

    Is it less expansive as the apartments in the city center of Luanda?

    What is the exact deal between the CITIC and the angolan govenment? Is it paid straight back with barils of petrol or is it the creation of a special partnership, or is it a loan?

    Is Kilamba accessible from outside or is it a community gate? Is it public or private? In other words: which status does the city has?

    What about the different phases of the project? How many apartments have been sold so far? How many more are coming?

    Finally: how about the infrastructure?

    If you guys have any website I could refer to in order to get more information, please, let me know!

    Thank you in advance...

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  7. Interesting post. Any feedback on how the ghost town is progressing? Am currently also working on a project on the Africa-China relationship. Would you like to be a part of it?

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  8. For more information about Chinese-built new cities in Angola, you can download the paper I wrote with Ana Alves following my fieldtrip in Luanda:
    http://www.saiia.org.za/news/new-research-chinese-built-new-towns-in-angola

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    1. This comment has been removed by the author.

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    2. Ok I read the paper and that was excellent and informative. It was even better than what I anticipated, a lot better than what I have seen written for the BBC. Your report was non-biased and informative. The price of those apartments need to come down even further for the local population. Most of what people read on Angola is heavily biased in one way or another. You have the western press that is hell bent on painting the gloomiest picture possible of "gloom and doom" lead by Rafael Marques de Morais and others who written for the Western press news agencies or you get the Angolan Government point of view which makes everything look perfect and there are no issues at all. Everybody should know by now you cannot trust everything Rafael Marques de Morais says because he has an "over the top" biased against anything done by an MPLA Government. My question to you David, do you know what is the current population of Kilamba?

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  9. Deborah,

    That new report "Oil for Housing: Chinese-Built New Towns in Angola" that you listed at the end of the article can *NOT* be downloaded

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  10. Thanks @Anonymous. I've fixed that, I think.

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