A railway concession agreement has been signed off by the Angolan government with a consortium that includes global metals and minerals trader Trafigura, infrastructure construction services provider Mota Engil and Vecturis, a Belgian railway operator that will see Zambia lose out on huge transport and logistics revenues if no immediate actions are taken by the Zambian government.
According to a statement by the Angola Ministry of Transport availed to the Zambian Business Times – ZBT, the rebuild and revamp of the Lobito railway between Angola and Democratic Republic of Congo – DRC will see the concessionaires (Trafigura, Mota Engil & Vecturis) invest US$256 million in infrastructure, US$73 million in equipment and rolling stock, and an additional amount of US$4 million in various activities.
Railway transport which is much more cost effective for the transportation of bulk mineral and Agro commodities which are currently being transported by road via Zambia to ports such as Dare-salaam in Tanzania, Beira in Mozambique, Durban in South Africa and Walvis Bay in Namibia.
Zambia risks losing out hundreds of millions dollars in logistics business opportunities of on the existing heavy cargo traffic from DRC through Zambia to its export and import destinations. Moreover, most toll gates in Zambia are collecting huge monthly revenues driven by the DRC traffic.
The statement seen by ZBT further indicated that the consortium will take over the operation, exploration and maintenance of the rail transport of goods between Lobito and Luau, as well as the maintenance of the entire existing infrastructure along the Corridor.
With the rents negotiated, the Angolan government expects to collect, in each period of 10 years, revenues of US$319 million, in the first 10 years, US$ 787 million between the eleventh and the twentieth, and US$ 919 million in the last 10 years of the 30 years concession.
The Angola Transport Ministry stated that the award of the Lobito Corridor brings other relevant benefits for the country, namely the direct impact on the development of industries, “heavily” dependent on the logistics chain, such as agriculture and mining, and the consequent creation of jobs in each of them.
As for Zambia, the government is more concerned with fighting local political battles. This has resulted in further delays in construction the Solwezi – Kipushi road to open alternative routes to DRC, delays in opening up of the jimbe and Shangombo border with Angola which are key to unlocking trade with resource rich neighbors in Angola and DRC. Zambia’s Minister of Transport Frank Tayali could not be reached for a comment at the time of going to press
