Afghanistan housing project underlines China's growing role

KABUL (Reuters) - Afghan authorities expect work on the first phase of a multimillion dollar housing project financed by China to begin within months, as Beijing continues to raise its development profile in the region.

The project, originally announced in 2015 during a visit to Kabul by Chinese Vice President Li Yuanchao, is expected to see construction of 10,000 housing units for Afghan civil servants after the project was cleared by both governments last week.

The first phase will see 1,400 units built near the old Darulaman palace in the capital Kabul, with China agreeing to provide 500 million yuan ($73 million) in finance. Two further phases are expected to follow, depending on successful implementation of the first stage.

“So far, the project is the largest Chinese-supported project in Afghanistan,” Hamid Jalil, a deputy minister at the Ministry of Urban Development told Reuters.

“We hope that within two to three months, we’ll be able to finalize procurement and start,” he said.

China is investing heavily in the region, with the $57 billion China-Pakistan Economic Corridor (CPEC) project to link its landlocked northwest to the Arabian Sea and projects such as the massive Mes Aynak copper mine in Afghanistan.

Although it has been very cautious about taking an active security role in Afghanistan, it has promised to help build up the economy which has been shattered by decades of war.

While the housing project counts as development aid and has no direct links to investments like Mes Aynak, which has been hit by wrangling over contractual issues, it underlines Beijing’s growing profile as a major player in the region.

“For donors what is important is visibility so that people can see their assistance and housing is one of the most visible projects,” Jalil said.

Past construction projects financed by foreign donors have sometimes run into trouble in Afghanistan, running over budget or failing to match local conditions and requirements but Jalil said he was confident the current project would be a success.

The Afghan government will select the main construction contractor from a list of Chinese companies provided by Beijing but he said Afghan authorities and local companies would be closely involved in running the project.

“The design is made by us, not by the Chinese government. Supervision will be by us, not by the Chinese government. And also the sub-contractors will be Afghan companies,” he said.

Reporting by James Mackenzie and Mirwais Harooni; Editing by Michael Perry