G.E. IS TRYING TO SELL LOCOMOTIVES TO ANGOLA

C O N F I D E N T I A L LUANDA 000810 SIPDIS E.O. 12958: DECL: 10/08/2018 TAGS: ECON ETRD PGOV AO SUBJECT: G.E. IS TRYING TO SELL LOCOMOTIVES TO ANGOLA Classified By: CDA JEFF HAWKINS FOR REASONS 1.4 (B) AND (D) ¶1. (C) SUMMARY: In March, 2006, GE International submitted the first of three proposals to the Government of Angola for the complete rehabilitation of the existent fleet of 33 locomotives for Angola,s three railroads. Despite numerous sales calls, a complete inspection of the country,s locomotives and a visit by the Vice Chairman of GE International to discuss the project, the company says it has yet to receive a single piece of written correspondence in return. GE is concerned by recent attempts by third party companies to &broker8 GE,s locomotive deal with the GRA in exchange for a cut of the profit. GE plans is attempting to restart negotiations directly with the Minister of Transportation. End Summary. ¶2. (SBU) Juliano Andrade, GE Sale Manager for Angola, told P/E Chief his company has been trying to help the country rehabilitate its aging fleet of 33 narrow gauge locomotives since March 2006. Andrade said GE sent experts to Angola in July 2007 to inspect the country,s locomotive fleet. As a result of the inspection, GE recommended that Angola purchase a contract to overhaul 12 of the locomotives in Angola and modernize 21 of the engines in Brazil, using parts manufactured in the United States. In November, 2006, GE asked for Embassy advocacy in reaching out to the Ministry of Transportation in support of the proposal. In 2007, the Vice President of GE International visited Luanda in support of GE,s locomotive proposal and other issues. ¶3. (C) Andrade said that despite repeated visits, sales calls, equipment inspections and VIP visits, the GRA has yet to respond in writing to GE ) &Not even a thank you note,8 Andrade added. On July 7, 2008, GE sent a letter congratulating the newly appointed Minister of Transportation, Agosto Tomas. GE attached a briefing paper with the history of GE,s proposals and an invitation to restart negotiations. They have yet to hear back from the government. ¶4. (C) Andrade voiced his concerned that on two separate recent occasions, representatives from third party companies have called on GE offering to &broker8 the locomotive deal in exchange for a piece of the profit. According to Andrade, Julio Bango, Director of the Mocamedes Railroad (CFM) in Huila (septel reports on Ambassador,s talk with Bango) also asked GE to work with a Portuguese company, Intercol, to more quickly advance approval of the locomotive contract. Andrade told the P/E Chief GE will not do business with these companies, and that he hopes negotiations with the GRA will soon bear fruit. ¶5. (C) Comment: Andrade seemed frustrated that two and a half years of work have yet to yield even marginal progress toward an agreement with the GRA to rehabilitate the country,s locomotive fleet. At the Embassy,s urging, Andrade undertook to reach out to the director of the CFM to discuss Bango,s recent comments made to the Ambassador suggesting that GE was not being responsive to Angola,s railway needs. HAWKINS