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State aims to withdraw from day-to-day functions in favor of private sector

Interview - August 14, 2014
Secretary of State for Transport José Kuvíngua talks about economic diversification, the role of the private sector in intermodal transport, opportunities for PPPs and some of the major transport infrastructure projects in Angola.
Angola has been among the top 10 fastest growing countries in the world – averaging in the region of 10.5% GDP growth between 2001 and 2010. There is a large scale focus in government strategy at the moment to diversify economically and create varied revenue streams. How is this being done and what role does the transport sector play in this initiative?

Obviously, Angola, like any country, wants to reach new heights of development and we are aware we cannot depend on one sector of the economy or singularly on our natural resources to provide our national income. Yes, we have to diversify economically in order to move this entire economy forward because only through integrating all the sectors, and in particular the sectors in the real economy, to the success story of our natural resource management will we take full advantage of the economic potential of Angola and place this country on a sustainable development path. Angola will, like many countries before her, pursue this method of integrated development to try to void overdependence on oil and the dangers this can cause for a nation’s economy. In this regard, transport, of course, will act as a facilitator and contribute greatly to the cross sector economic progress. In the National Development Plan 2013-2017, transport infrastructure investment is highlighted as a priority area which will create greater benefits in the wider economy and enhance domestic growth and allow us to tap into the regional market in a more meaningful way.

The government is working hard to create an intermodal transport system here in Angola which does not consist only of ports, but also railways, roads and air transport. Why is the government implementing this model?

Today intermodality is the key focus when trying to create a transport system which best adapts to the environment it hopes to serve. To best utilize the various forms of transport available and maximize the economic impact we hope to achieve from these transport systems we can no longer look at the different modes of transport in isolation. They complement each other perfectly and we have seen cases such as this in abundance here in Angola, where the geographic positioning of major projects encouraged us to develop integrated transport solutions.

What is the importance of public-private partnerships (PPP) to Angola and what opportunities exist for U.S. investors in this sector?

Public-private partnerships are always very welcome in any country and especially given our intention to develop our infrastructure and provide a world class transport service. There is always room to work with the private sector given the large needs that Angola, which is a vast country, still possesses in terms of transport infrastructure needs. Infrastructure capital investments require a large outlay and obviously while the government shoulders the burden of financial obligation as the lead developer in Angola on most projects, the government can only be extended so far, thus there will be a large role for the private sector in these projects.

We want private investors to pursue their interests in establishing partnerships with the provinces to jointly develop the country. Speaking specifically about the transport sector, we already have experienced good results with these partnerships and are open to further cooperation. Here we can cite as an example the Port of Luanda where the infrastructure is owned by the state, under the guise of the port company Luanda-EP, while more operational services within the port are provided by private operators through concession contracts.

These private sector operations providers such as Multiterminais and Unicargas, are constantly improving the efficiency of the port. Both the state and the private operators have gained from this arrangement in the port of Luanda and it is an example we hope to recreate in other ports with even more modernization and rehabilitation of infrastructure and services. The philosophy is the state slowly withdrawing from the day-to-day functions that can be private sector lead.

We have recently instituted and approved the necessary legislation changes that provides for the same opening of opportunities to the private sector in the provision of our railways system and airport management structures. There is also more room for the private sector in the construction of logistics platforms integrated into the national transport network. In short, the openings for PPPs is vast and willl be at the forefront of future development.

One of the most significant intermodal transport projects has been the Lobito Corridor. Can you tell us more about its importance for Angola and the south of the country?

The Lobito Corridor project has the potential to drive the development not only for the country, but also for the whole southern region of Africa. It is a prime example of the intermodality we discussed as it links the four modes of port, road and air with a heavy focus on rail as its backbone. The Lobito Corridor project is a project to make maximum use of the privileged geographic position of Angola in relation to the countries in this region.

For example, the Port of Lobito is connected to the railways, through Caminhos de Ferro Benguela which serves the whole hinterland of Angola from Benguela, Huambo, Bie and Moxico with a length of rail of 1346 km creating a link to the two landlocked countries, the DRC and Zambia. This project cuts the distance by over a third that exporters in these countries would have to transport their goods to make it to a sea port. This creates a competitive advantage for Angola when previously exporters in DRC and Zambia may have used the Port of Durban or maybe the Port of Walvis Bay.

This gives you a glimpse at the importance of the Lobito Corridor project for Angola. It will be a stepping stone to also reaching other countries such as Tanzania, Zimbabwe, the Central African Rep, Rwanda, Burundi etc.

How do you envisage the transport sector in Angola in the next 5 or 10 years?

As I said earlier, we intend to provide the country with a modern intermodal transport infrastructure (ports, airports, railways and highways) in a domestic sense first and then looking towards creating regional synergies and solutions. Therefore it is necessary we put together a well thought through plan for the medium-term to create conditions that facilitate the transport of people and goods and give the necessary support to the development of the country’s economy. Angola’s natural geographical position is an advantage which we need to maximize and locate Angola as the hub of choice for the countries of Central and Southern Africa. This strategic aim has always been at the heart of our government’s planning in relation to transport infrastructure.

What can we expect in terms of railway system development in Angola in the coming years?

The current development of CFA, Angola’s Railway System, is based on the Sustainability Master Plan for development of the sector in Angola which provides for the rehabilitation and modernization of our three main lines and the proposed connection of these three independent lines (CFL CFB and CFM) in the future. We currently have a real rail network with three horizontal corridors and the future will involve the vertical connecting of these lines. Rail is the key to a competitive industrial sector, and we will be aiming to support the transport of all types of cargo, including mining produce between industrial zones and sea ports. The railways system must also better cater to the movement of people themselves and create affordable links between our main cities. We will be looking at the construction of approximately 2,000 km of lines which is no small undertaking. Then will come connectivity with neighboring countries all culminating in the fulfillment of our part in building the great Trans-African Network which is the end goal. We predict that the culmination of this dream will even involve the use of iron cast here in Angola a feat that would make us all very proud and hopefully something we can achieve.

What message would you like to convey to American investors considering opportunities in Angola?

To the Americans and even to the world's investors my message is that the time to participate in the development of Angola is now, in fact you may even be arriving late to the event. If you wait much longer there may be no more challenges for which we need the expertise of international investors. There is still much scope for investment. Angola is in many cases a greenfield investment site with many projects available to the private sector. The sooner you come and join the efforts of the Angolan people towards creating sustainable development and a better Angola for all the better. The time to invest is now!