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A brief by Chr. Michelsen Institute (CMI) and Centro de Estudos e Investigação Científica (CEIC) BRIEF

April 2014 Volume 4 No.5

Angola’s Corridor From reconstruction to development Photo: Ana Duarte Photo:

This brief reviews the state of the transport corridor which runs from the of Lobito and the city of through the hinterland of Angola before it connects with the mineral rich regions in the Democratic of Congo and . The once important was destroyed during the war and has not been in use since 1975. With Chinese assistance the railway has now been rebuilt from Lobito to the border with Congo. Minerals are yet to be transported to the port, but the corridor is already having an impact on the lives of the communities living along the corridor and is contributing to social and economic transformation.

THE BENGUELA RAILWAY Ana Duarte Researcher, Lusíada The armed conflict in Angola had a devastating University, Lobito impact upon the . At the end of the Construction of the renowned Benguela Railway war the national roads and railways had largely (CFB) began in 1902 when the Portuguese Regina Santos been destroyed. For example nearly 350 rail and colonial administration awarded the British road bridges had been ruined. Since the peace capitalist Robert Williams a concession to Researcher, CEIC, Catholic agreement in 2002, Angola has embarked upon build a railway from the Atlantic University, a major reconstruction and development of its (Angola) through the central Angolan damaged infrastructure. Peace and political and connecting with the copper producing Elling N. Tjønneland stability set the ground for an economic boom of Shaba (Katanga) on the border between what fuelled by revenues from the oil production. is now the Democratic Republic of Congo (DRC) Senior Researcher, Significant achievements have been recorded and Zambia. The railway was completed in CMI, Bergen in the rehabilitation of roads, railways, 1929. The primary purpose of the project was and airports. However, despite the progress in to capture the of minerals from Katanga, reconstruction Angola is still facing shortages. but the revenue from domestic Angolan This is especially evident in relation the quality of transport remained a major source of income services and the impact on reduction of . for the railways throughout (Katzenellenbogen This is also well illustrated with the case of the 1973). The CFB proved very successful and Lobito corridor profitable, and gained increased importance, ANGOLA BRIEF APRIL 2014 VOLUME 4 NO.5 ANGOLA’S LOBITO CORRIDOR: FROM RECONSTRUCTION TO DEVELOPMENT

China has been a particularly after 1973 when Rhodesia closed its purpose also for the Brazilian credits lines border with Zambia. is the stimulation of Brazilian companies’ particular engagement in the construction industry and The economic and strategic importance of the reconstruction of infrastructure in Angola. important the Benguela railway line made it a target for provider of sabotage during the colonial period. The line The construction boom has severely tested was first seriously damaged on Christmas Eve the government’s capacity to plan, implement such finance in 1966, when UNITA launched its first major and manage. Poor oversight and lack of operation. After several attacks and proper procurement procedures have also when Western disruptions, the line was closed completely in weakened the efficiency of the construction August 1975. At this time, while much of the (Søreide 2011). However, the sheer size of countries railway was under MPLA control, part of the line the investment and volume of construction were reluctant was occupied by UNITA forces. from has made the reconstruction a success. The Katanga in seized control of other parts. reconstruction itself has now reached a stage or refused The closure of the railway became a disaster where the focus is shifting towards ensuring not just for the railway and Angola, but also that the infrastructure can provide the to provide for Zambia and Zaire/DRC which had to find intended services and be an engine for growth transport outlets through the more expensive and development (cf. African Development funding. routes to the ports in East and Southern . BankTHE LOBITO 2013). TRANSPORT CORRIDOR

The post 1975 war also effectively damaged all roads between Lobito and Benguela on the coast The multimodal Lobito Corridor comprises and the Angolan highlands and the interior of the not only the Benguela railway, but also the ” country.RECONSTRUCTION: GOVERNMENT PRIORITIES port, roads, airports and logistic platforms. AND FINANCE An estimated 40% of the population of Angola lives within the catchment area of this corridor. Until 2010 the National Reconstruction Office Reconstruction of the transport infrastructure (GRN) was in charge of the reconstruction has been a main priority of the government. of the corridor. The responsibility wasthe then Lobito The bulk of the investment for this has been shiftedDevelopment to the CorridorTransport Office Ministry. Now a provided from the government’s own resources, special section within the Ministry – in particular the oil revenues. Only about 20% - is in charge of the of the investments were funded from foreign development and management of the corridor. sources according to estimates in a recent Bank study (Pushak and Foster 2011). The Lobito corridor is also significant in a regional perspective. It provides a much Foreign funding came from a variety of sources shorter route to a port from the mineral- and was mainly provided through export credits rich areas in DRC and Zambia. For the and loans. has been a particular important regional cooperation organization SADC, provider of such finance when Western countries the Lobito transport corridor is seen as a were reluctant or refused to provide funding major development corridor in Southern (Corkin 2013). China provided its first US$2 Africa with benefits not just for Angola and billion credit line in 2004 for the reconstruction neighbouring DRC and Zambia, but also for of the transport infrastructure. The agreement the rest of the region (Caholo & Bingandadi was signed with state-owned Export-Import 2012, Tjønneland 2011). The governments of Bank of China. Angolan repayments were Angola, DRC and Zambia plan to develop and linked to the delivery of oil. These “oil-for- sign an MOU governing their cooperation on infrastructure” deals later became known as the development of the Lobito Development the “Angola mode”. The first credit line was Corridor. followed by a number of other Chinese credit lines. Projects identified for funding included The railway system is a main component in the reconstruction of the three rail lines that run the Lobito corridor. The rehabilitation of the east from the three main coastal ports of Luanda, Benguela railway started in 2006 and was Lobito and Namibe. Other projects included the completed in 2013. It runs from the port rehabilitation of roads, housing units in Luanda of Lobito to the Luau- border post and 17 other provinces, the Viana industrial between Angola and DRC, a stretch of 1344 area and the new airport. A large number of km. It includes not just the tracks but also Chinese companies, the majority state-owned, locomotives, wagons and 70 railway stations entered the Angolan market. These Include the and warehouses. The railway is not operational China Road and Bridge Corporation, China State on the DRC side of the border. Zambia has Construction Engineering Corporation, China begun work to plan a new railway track from Guangxi International Construction and Jiangsu. the copper belt running through the Angola- Zambia border post of Jimbe and connecting Export credits and loans were also provided with the Benguela railway at Luena. Once by a range of other governments, among them operational, the Lobito Corridor will constitute , , , Germany, Canada and the shortest route to a port (Lobito) for the . The role of Brazil is particularly Katanga region (South DRC) and the Copper important. Brazilian companies involved Belt (North-western Zambia). This line will also included Petrobras, Odebrecht, Vale, Andrade enable import of oil to Zambia. 2 Gutierrez and Camargo Corrêa. The main ANGOLA BRIEF APRIL 2014 VOLUME 4 NO.5 ANGOLA’S LOBITO CORRIDOR: FROM RECONSTRUCTION TO DEVELOPMENT

MAP 1: THE BENGUELA RAILWAY The Port of Lobito has been modernized and expanded with one container terminal, one mineral terminal and an oil terminal. DEMOCRATIC The government has invested US$1.2 billion REPUBLIC OF with additional funding from China. The THE CONGO rehabilitation and upgrading of the port has ANGOLA been done by China Harbor Engineering Company Lts. The port will have a capacity to move 3.7 million tonnes that will be expanded to 4.1 million when the Benguela Railway is BIÉ working at its full potential. Lobito Jimbe BENGUELA

The corridor also has one international airport in between Lobito and Benguela. It was built by a consortium of companies which included Odebrecht (Brazil), Somague ZAMBIA (Portugal) and Imbondex () and funded through government funds and foreign credit lines. This airport is considered by the government to become a crucial component of the Lobito Corridor. A number of provincial COMPLETED PLANNED RAILWAY LINK TO ZAMBIA airports along the corridor, including Benguela, Huambo, Kuito and Luena, have also been rehabilitated and modernized.

The Lobito Corridor also includes a significant the future and with an operational corridor from road network from Lobito to DRC and Zambia the Atlantic to the Indian Ocean. through the Luau-Dilolo border post. The road also links with the road system in DRC While the Lobito Corridor has seen some at and a road from Luena (Angola) remarkable progress in the rehabilitation and through Cazombo to in Zambia. This reconstruction of transport infrastructure there is projected to become a called is much work to be done to ensure its efficient Trans-African Highway (TAH 9) running from use. The port is still only an import harbour with Lobito to Beira in . The road runs no export of minerals taking place. This will not parallel to the Benguela railway. However, happen before the railway link to Zambia has been the road construction is not yet completed. It constructed. Most goods from the port and from is only rehabilitated from Lobito to Kuito in the coast are still transported on the roads to the Bié province. The approximate stretch of 710 highlands. km from Kuito to Luau on the DRC/Angolan border is still in a very poor condition. The railway is however becoming increasingly Communities living in this area are still very important for passenger transport. The Benguela isolated and are highly dependent on the new railway is providing an increasingly important rail transport that runs twice a week between service for communities living along the Kuito to Luena in the , a 409 railway, particular in more remote areas. This km distance that lasts approximately 17 hours. is particularly evident in the Bié and Moxico provinces where roads are still highly damaged The provincial governments are responsible and often not easily drivable. for the reconstruction, financing and maintenance of the regional roads or the Provision of train services has also facilitated the feeder and community roads in the Lobito reestablishment of commercial links between Corridor. This is done under the technical urban and rural areas and between inland and supervision of INEA - Angola National Roads coastal areas. It has also led to the emergence National Institute. Since 2012 INEA has a of «intermediate trade centres» acting as strategic programme for the rehabilitation collection and distribution points for low-income of secondary and tertiary roads (Programa households. These centres also represent a de Reabilitação das Estradas Secundárias e fundamental social infrastructure, because Terciárias). The plan provides guidelines and information and ideas can now spread more prescriptions regarding the use of local labour freely. Finally, the intermediate centres not only and construction companies in an effort to provide a basis for a more equitable distribution facilitate increased employment opportunities of social services but also act as attraction points and better linkages and integration of rural for small-scale traders and transport operators communities. and training grounds for rural-to-urban migrants. The importance of these centres has also favoured A final component of the Lobito Corridor is the a shift away from the major trunk road of the logistic platforms that are being planned and corridor towards expanding the network of developed to facilitate improved utilisation of secondary,CHALLENGES: rural MAKING and agricultural THE CORRIDOR feeder roads.AN the different transport systems in the Corridor. INSTRUMENT FOR DEVELOPMENT The vision of the officials involved is also that this help to ensure that Lobito can become a continental logistic hub sometime in We are already witnessing important social 3 The Angola Brief series is an output of the CEIC-CMI Cooperation Programme for research in social and economic issues concerning Angola. The series aims to contribute research findings and policy recommendations to enhance public debate in and about Angola. This brief is based on data collected through an on-going research project on the Lobito Corridor jointly implemented by CEIC and CMI . Editors: Alves da Rocha and Aslak Orre. Copy editor: Lisa Arnestad.

transformation taking place in the Lobito such as transport safety and maintenance of Corridor. The combination of infrastructure the infrastructure must also be addressed. development and responses from and Safety regulations have not kept pace with adaptation by people and communitiesinter alia improvements of the infrastructure. This is living along the corridor are already having relevant in the two main urban areas of the important impacts. We can identify corridor, namely Lobito and Benguela, where the emergence of local entrepreneurship and the users of transport services complain that transition to a market economy, and new the vehicles (including motorised and non- lines of social and economic divisions in the motorised transport services) used by the communities. new transport providers in many cases are not roadworthy, the vehicles are overloaded are The development of the corridor is also reaching often driven irresponsibly, with drivers flouting a turning point. We are moving from the era of the most basic traffic rules. This has also rehabilitation into the era of development of resulted in a number of fatal road accidents. infrastructure required for the country’s future growth and development. The rehabilitation - A better regulatory system has to be put in while in many instances a success - have also place to ensure that the new motorized service suffered from insufficient planning and lack of providers also operate on the less busy and feasibility studies, weak public oversight over the more remote routes. And more efforts will have construction, and lack of competition. This in turn to be put in to ensure that the new transport may have increased costs and reduced the quality services may also be accessible for the very of the infrastructure provided. Furthermore, poor. There is also a need to improve labour this may have led to a situation where the needs conditions in the transport sector. There must of poor people and communities have received be greater efforts to hire workers from the insufficient attention. local communities and to facilitate on-the- training and better linkages to the local Future challenges that must be addressed by economy. Angola and the authorities responsible for the corridor, includes the further rehabilitation – Finally, there is a need to speed up the and construction - of secondary and tertiary preparation for integrating the Corridor with roads which can ease communication and the SADC transport network, in particular the access by rural communities. New issues rail link to Zambian copper belt. FURTHER READING (2013): Study for National Nataliya Pushak and Vivien Foster (2011), Angola’s Transport Sector Master Plan Update. Country: Infrastructure: A Continental Perspective, Washington Angola, Appraisal for the African Development Fund D.C.: World Bank (Africa infrastructure country diagnostic) Joao Caholo & Lovemore Bingandadi (2012): “Lobito Corridor Development: Opportunities, Potential Tine Søreide with Alves da Rocha, Regina Santos, and Prospects for Its Development,” presentation António Costa and Nelson Pestana (2011): “Ten by SADC at the International conference on The challenges in public construction. CEIC-CMI public Transport Infrastructure Development in The Lobito sector transparency study, Bergen and Luanda: Corridor, Lobito 29-30th November CMI and CEIC (Angola Brief No 19, November) (also available in Portuguese as Dez Desafios na Lucy Corkin (2013), Uncovering African Agency: Construção Pública. Estudo CEIC-CMI: Transparência Angola’s Management of China’s Credit Lines, no Sector Público) London: Ashgate Elling N. Tjønneland (2011): Developing Angola’s Ana Duarte (2013), “The Ambivalent Character of infrastructure: What is SADC’s role? Bergen: CMI Reconstruction: Losers and Winners of the Lobito (CMI Working Paper WP No 3) (also available in Transport Corridor Development,” Journal of US- Portuguese as Desenvolver as infra-estruturas em China Public Administration, vol. 10 (9): 914-926 Angola: Qual o papel da SADC?) S. E. Katzenellenbogen (1973), Railways and the copper mines of Katanga, Oxford: Clarendon Press

CMI (Chr. Michelsen Institute) CEIC (Centro de Estudos e More information is available at the Bergen - Norway Investigação Científica) CEIC-CMI cooperation program website: Phone: +47 47 93 80 00 Universidade Católica de Angola WWW.CMI.NO/ANGOLA E-mail: [email protected] Phone: +244 922 280 541 www.cmi.no E-mail: [email protected] ISSN 1892-3933 www.ceic-ucan.org