The representative of the World Bank in Mozambique, Michael Baxter, speaking to AIM, was enthusiastic about the leasing of ports and rail lines to private operators, but he admitted that the northern port of Nacala, leased to the Nacala Corridor Development Company (CDN), a consortium led by the American companies Edlows and the Railroad Development Corporation is not yet as profitable as expected, "though there are already some positive trends".
At the same time, despite a significant increase in traffic in Maputo port, it is still much below expectations, "which has been causing some temporary financial problems to the leaseholder".
The leaseholder in question is the Maputo Port Development Company (MPDC), a consortium headed by the British Mersey Docks and Harbour Company, and the "financial problems" include its failure to pay CFM the contractually agreed rent for its lease.
Under the terms of the lease, MPDC is supposed to pay an annual rate indexed to the US Consumer Price Index, plus a percentage of pre-tax gross income (starting at 10 per cent in the first year, and eventually rising to 15 per cent). The chairman of the CFM board, Rui Fonseca, has repeatedly complained of MPDC's failure to meet its financial obligations.
Baxter regarded the restructuring of CFM as a great success largely because the company has managed to reduce its workforce from 20,000 to only 1,500. (This reduction is not quite as drastic as it looks because some of the workers were transferred from CFM to the leaseholders).
Baxter also noted that the retrenched workers "received their due compensation, training in various areas, and were given opportunities for self-employment".
The World Bank has been helping CFM rehabilitate the Ressano Garcia line, that links Mozambique to South Africa, and traffic here is expected to increase substantially in the near future.
This is one of the lines that has not been leased out - a consortium headed by the South African rail company Spoornet was to have taken over the line, but reneged on its promises, and so CFM retains full control of this railway.
With an investment of 20 million US dollars in the Ressano Garcia line, cargo transport along the railway is set to reach a volume of nine million tonnes a year by 2009. CFM says that this growth is based on the desire of both the Mozambican and the South African governments to increase trade between the two countries.
To guarantee more security for cargo and for rail equipment, this programme also includes construction of an electrified fence along the six kilometres from Maputo port to Infulene station.
This is to isolate the line from the surrounding residential areas, from where people used to slip out onto the line to steal goods from wagons and vandalize equipment in transit to the port.
SOURCE: AIM
