A brief by Chr. Michelsen Institute (CMI) and Centro de Estudos e Investigação Científica (CEIC) ANGOLA BRIEF April 2014 Volume 4 No.5 Angola’s Lobito Corridor From reconstruction to development Photo: Ana Duarte Photo: This brief reviews the state of the transport corridor which runs from the port of Lobito and the city of Benguela through the hinterland of Angola before it connects with the mineral rich regions in the Democratic Republic of Congo and Zambia. The once important Benguela railway 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 infrastructure. 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 port of Lobito University, Luanda a major reconstruction and development of its (Angola) through the central Angolan highlands damaged infrastructure. Peace and political and connecting with the copper producing area 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, ports 1929. The primary purpose of the project was and airports. However, despite the progress in to capture the export 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 poverty. 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 traffic 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. Mercenaries from has made the reconstruction a success. The Katanga in Zaire 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 Africa. 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 World 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. China 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-Dilolo 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 Portugal, Brazil, Spain, Germany, Canada and the shortest route to a port (Lobito) for the South Africa. 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 Luacano to 4.1 million when the Benguela Railway is BIÉ working at its full potential. Lobito Jimbe HUAMBO BENGUELA The corridor also has one international airport MOXICO in Catumbela between Lobito and Benguela. It was built by a consortium of companies which included Odebrecht (Brazil), Somague ZAMBIA (Portugal) and Imbondex (Cuba) 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 Kolwezi and a road from Luena (Angola) remarkable progress in the rehabilitation and through Cazombo to Solwezi in Zambia.