$2.8 Billion Infrastructure Projects Supported by Power, Mining, and Other Industrial Development in Mozambique

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Researched by Industrialinfo.com (Industrial Information Resources Inc; Houston, Texas). Mozambique is becoming a significant target market for a wide range of transport engineering, civil engineering contracting and supporting supply chain infrastructure providers. In the period up to 2010 there are plans in the rail, harbor and airport sectors worth around $2.8 billion. These target projects include and are backed by an integrated scheme of mining, power, agricultural, tourist and manufacturing projects, which will support and develop the viability of the transport sector investment. Mozambique has a profile as an investor welcoming and tax happy investment destination with a real urge towards good business governance. Government concern for the plight of the population after brutal civil war and a series of fatal natural disasters is providing a standpoint to fight post-colonial and newly empowered bureaucratic and commercial corruption. Integration with the aims and objectives of close neighbor, South Africa, lends weight and viability to the macro planning.

In May this year, the World Bank issued a prequalification tender for the project to rehabilitate and operate the Sena and Machipanda railway lines, which link Mozambique's Zambezi province with Zambia and Zimbabwe. The 582-kilometer Sena line will cost $350 million to rehabilitate after its destruction in the war. The Machipanda line is operational but degraded.

South Africa's Industrial Development Corporaton (IDC) which is one of the bidders, with SA's rail operator Spoornet as a technical partner, has included other projects, in the scope of the bid, which would ensure the rail line's sustainability. These include the development of a coalmine at Moatize, near the junction town of Tete for which a due diligence and feasibility study was begun by the IDC and potential partners in July. This study should be completed by the end of the year.

Coking coal from the projected mine will be used for steel production and steam coal feedstock for a 1,000 Megawatt (MW), $1 billion power station. This is seen as a project for decision at the longer-term end of the scheme. Although the naming of preferred bidders and partners is still in the future, on a six to twelve month scale agriculture, forestry and business growth opportunities along the rail line are all focused.

A new $520 million Maputo harbor project has been the subject of preliminary assessments by the government which indicate that the deep-water harbor is viable and will go ahead. Three investors have been identified as being interested in taking part in the project with Mozambican Ports and Railways and the privately held Porto Dobela Developments (Isle of Man). The main contracts cover the building of a passenger terminal, a cargo handling facility and an inland industrial free trade zone. A construction schedule and preferred bidders are now awaited. There is intense activity all around the southern African coastline in terms of harbor building and modernization. The harbor will be at Ponta do Ouro, 100 kilometers south of Maputo, and it is estimated that it will turn over $344 million per annum. Environmentalist objections to the harbor site delayed the decision to go ahead has been overcome.

By the end of the year Aeroportos do Mocambique (ADM) will select a concessionaire, from the final four prequalifying consortia, to work on the modernization of Maputo International Airport. Investment required is estimated at up to $30 million. Assets in the concession include passenger terminal rehabilitation, the cargo terminal, runway resurfacing, parking areas, the apron, runway lighting systems, air navigation systems, instrument landing systems and other airport operating systems. The winning consortium will form a special purpose company with the ADM and private Mozambican operators.

A major motivating factor to move the total airport project to completion as fast as possible is the continuing rise in demand from tourism. Southern African regional cash flow is estimated to reach $52 billion per annum from tourism by 2010. The new airport operating facilities will assist in domestic and regional market integration.

The New Partnership for Africa's Development (NEPAD) has Mozambican projects on its priority list. This backing should assist both in the scheduling of projects and the identification of project investors.