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