Cablegate: Angola -- Benguela Railroad Construction In

VZCZCXRO5366
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHLU #1015/01 2761255
ZNR UUUUU ZZH
R 031255Z OCT 07
FM AMEMBASSY LUANDA
TO RUEHC/SECSTATE WASHDC 4352
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHBJ/AMEMBASSY BEIJING 0103
RUEHHK/AMCONSUL HONG KONG 0006

UNCLAS SECTION 01 OF 02 LUANDA 001015

SIPDIS

SENSITIVE
SIPDIS

FOR AF/S AND EAP/CM
DEPT PASS USTDA

E.O. 12958: N/A
TAGS: ETRD EINV AO CH
SUBJECT: ANGOLA -- BENGUELA RAILROAD CONSTRUCTION IN
ABEYANCE

REF: LUANDA 648

1. (SBU) Summary: The Benguela Railway is one of three
strategic railroads linking Angola with its neighbors to the
north and south. Although the China International Fund (CIF)
won a contract to the restore the Benguela line in January
2006, the company has yet to lay down rails. The Chinese
director of the CIF's prime subcontractor reports his company
has not been paid by the CIF, and that restoration of the
Benguela line will not move forward until the CIF's
(unspecified) financial problems are resolved. End Summary.

CFB Tries Bootstrapping
-----------------------

2. (SBU) On 24 September 2007, Econoff and visiting
political and economic officers met with Gil Vaz de Carvalho,
the Financial Manager of the Benguela Railway (CFB). When
operational, the Benguela railway connects Southern Africa to
the Democratic Republic of Congo and Zambia. The railroad
has been inoperable since Angola's 1974-2002 civil war.
Since late 2005, according to the CFB, the railway has
operated on 221 kilometers of restored track in three
isolated sections, providing passenger service in the
Benguela-Lobito area, around the city of Huambo, and around
Kuito, Bie Province. The CFB itself laid the rails,
contracting out the work of building bridges and grading some
sections of right-of-way. Passenger service does not earn
enough to cover operating costs, however, so the CFB
currently depends on GRA subsidies to continue operating,
said Vaz de Carvalho.

3. (SBU) In January 2006, Angola's Office of National
Reconstruction GRN awarded the contract for restoration of
the Benguela Line to the China International Fund. The CIF
subcontracted the restoration to various Chinese construction
companies, principally the 20th Railway Construction Brigade
(RCB). The work, including laying the rails, building new
stations, and installing all signaling, was originally to
have been completed by August 2007, according to the
contract. Over the last 21 months, according to the CFB, the
20th RCB has constructed nine work camps, bulldozed rough
access roads, established a gravel quarry and positioned
equipment, but has not laid a single rail. (Note: The next
day, the director of operations for the 20th RCB, a Mr. Niu,
informally acknowledged to Econoff that work could not begin
because the CIF "has no money" to pay for the work currently
being done). According to the CFB, even if the 20th RCB began
laying rails, a 400-kilometer section of the railroad between
Camacupa and Luena has not yet been demined by the Angolan
Armed Forces (FAA).

Press Reports to the Contrary
-----------------------------

4. (SBU) On September 15, Angola's Government-owned daily,
the Jornal de Angola, reported that work on Angola's three
railway lines was already 75 percent complete, quoting data
from the Ministry of Public Works. The article avoids
mentioning track laying on the Benguela line, instead listing
the construction of access roads, a factory to produce
ballast (gravel) and a production plant for concrete railway
ties. The report also mentions the FAA is clearing mines
from the 400 kms. of affected throughway. Vaz de Carvalho
said he had read the article and was puzzled by the report,
especially, he added, because the Ministry of Public Works
has no responsibility for the Benguela project.

Eager Mine Owners in the Congo
------------------------------

5. (SBU) Mine Operators in the Congo and Zambia are eager
to have an alternative route to export minerals. Their ore
takes three weeks to reach Durban by rail, explained Vaz de
Carvalho. When they try sending the ore by truck with armed
escorts, he continued, bandits attack the convoys, the
drivers and cargo vanish, while the trucks or their trailers
may be identified months later in Mocambique or Tanzania.

Comment
-------

6. (SBU) The work stoppage on the Benguela line parallels
prior reporting on problems facing restoration of the Malange
RR line (reftel). Niu's explanation supports some rumors
among the Chinese in Luanda that the GRA's loose management

LUANDA 00001015 002 OF 002

of oil credits and its opaque relationship with the CIF may
be key factors in the delayed roll out of politically
important social and economic development projects.
FERNANDEZ

© Scoop Media