High-Speed Rail: Venezuela's "Red Elephant" Project

Paraphrasing Enya: Rail away, rail away, rail away.

They say that you may lend a country so much that you eventually end up owning it if it cannot pay, and this belief has interesting implications for modern-day Venezuela. It is estimated--no one knows for certain what the true amount is--that China has lent the Chavista-era socialist government $50B [!] in cash-for-oil deals. It supposedly signed up to yet another such deal recently, possibly staving of Venezuela's inevitable default under current leadership.

That said, the Chinese are not totally suckers in every respect. Sure, they may eventually "own" Venezuela with among the world's largest oil reserves--handy for when oil prices rise again in the future. But, for a "red elephant" project--a high-speed rail link in the country's even less-developed interior--the Chinese have already stopped work. Instead of being a "white elephant" project--a government vanity project which gobbles up public funding for not much public benefit, if at all--what we have here is a "red elephant" project: a communistic endeavor which ends up being of use to precisely no one:

As with many unfinished politically motivated projects dotting Venezuela — government critics call them "red elephants" — the decaying infrastructure contrasts with the railway's promising beginnings. A decade ago then-President Hugo Chavez dreamed up the Tinaco-Anaco railway as a way to populate the plains and attract development from long-dominant coastal areas.

Stretching 300 miles (468-kilometers), it was intended to move 5 million passengers and 9.8 million metric tons of cargo a year at speeds up to 135 miles (220 kilometers) per hour. Chavez turned to China, one of his closest ideological allies, for engineering and financing for the project, part of a $7.5 billion deal that has made Venezuela the world's top recipient of Chinese loans. A consortium of state-run companies led by China Railway Group Ltd, the world's largest train maker, was tasked with carrying out construction. 

At this rate, it's likely that nothing will become of it, to no one's real surprise:

But completion is four years overdue, and work, when it happens at all, has slowed to a crawl. At one barracks facility visited by The Associated Press, half a dozen workers huddled under the shade of a giant cement mixer, while two shirtless managers lounged at a control panel smoking cigarettes. Nowhere are the project's declining fortunes more visible than in Zaraza, a sweltering crossroads town of 75,000 where what used to be an arena-sized factory churning out concrete railroad ties was located.

In government news reels from 2013, the complex can be seen towering over manicured lawns and outdoor basketball courts where Chinese and Venezuelan workers socialized. Shortly after the last Chinese managers left in January 2015, a mob of local residents — some of them armed — ransacked the site and hauled away everything of value. First to go were power generators, computers and air conditioners on the back of pick-up trucks. Vandals then tore apart dozens of buildings to scavenge for metal siding, copper wiring and ceramic tiles, some of which are now on sale at roadside stalls. 

While the Chinese are not exactly shy about spreading state largesse to win friends and influence people, what could have led them to believe this project could ever amount to anything but a total waste of time and money?

Ah well, maybe it helped secure their chance to "own" Venezuela in the near future. In which case, it was just a rather costly bribe of sorts.