IT'S NOT JUST LUANDA: DEVELOPMENT IN THE PROVINCES

UNCLAS LUANDA 000854 E.O. 12958: N/A TAGS: PGOV KPAO PHUM AO SUBJECT: IT'S NOT JUST LUANDA: DEVELOPMENT IN THE PROVINCES Refs: A) Luanda 774 B) Luanda 828 ¶1. Summary. A recent series of Embassy visits to the interior of Angola show that the reconstruction and growth so prominent in the capital are evident in other parts of the country as well. The cities of Lobito and Benguela are experiencing significant building booms, with an emphasis on major infrastructure projects. Chinese and Portuguese firms are key players. End Summary. ¶2. Ref A reports on the Ambassador's recent visit to Huila and Namibe, two provinces experiencing rapid growth. A recent visit by DCM and an Embassy team to the two coastal cities of Lobito and Benguela, in support of a U.S. Navy ship visit, reflect a similar dynamism there, with a particular emphasis on infrastructural projects. ¶3. The city of Lobito, with an excellent natural harbor, was founded in the early 20th century as an outlet for the Benguela Railway, which joined the copperbelt of interior southern Africa with the sea. Angola's long civil war broke that link and severely damaged much of the infrastructure on which the region's economy was built. Now, Lobito and Benguela are reestablishing those ties and building on their location near significant offshore oil/gas fields. ¶4. The Director of Lobito Port told DCM that the port itself was undergoing significant improvement, and pointed out a series of construction sites at the dockside. A key would be the reopening of the Benguela Railway, which the Director believed would be completed within 18 months. The port also hoped to serve the capital, where the Port of Luanda suffers significant delays due to overstretched capacity. Recent improvements in the road between the capital and Lobito have cut transit times in half - to about six hours - and made the port increasingly viable as a hub for Luanda. (Note: The Embassy is currently investigating the possibility of using this port for HHE shipments.) ¶5. Other infrastructural projects are underway. Work on reconstructing the railway to DRC is proceeding. The highway between Lobito and Benguela follows the rail line, and orderly camps for Chinese railway workers dot the road. The next step is completion of the Lobito - Huambo leg. A Portuguese construction firm is building a sizable new bridge over the river that separates Lobito and Benguela, and the large construction site has traffic between Lobito and Benguela completely snarled. The Mayor of Lobito told DCM that work has begun on the rehabilitation of a military airfield for use as a new civilian airport. A rep from Esso spoke about his firm's plans to capture natural gas from its offshore oil production platforms to supply the proposed LNG plant in Soyo; oil and gas firms operate out of Lobito to service offshore fields. Ref B discussed state oil company Sonangol's plans for a new refinery in Lobito. ¶6. The economy of both towns is heating up. While still relatively quiet, and quaint, provincial towns by Luanda standards, Lobito and Benguela are rapidly rebuilding. Long-time residents have complained of increased traffic and increases in housing prices. The Portuguese head of Lobito's cement factory told DCM he was getting "60 calls a day" from builders frantic for materials; the company is building a second cement factory in the area. DCM visited the new Lobito campus of Universidad Catolica, Angola's premier private institution, which has recently expanded into the Lobito area. ¶7. Comment. Angola remains a difficult place to do business, and the vast majority of its people are crushingly poor. Nonetheless, revenues generated by oil and diamonds are reconstructing the country, and foreign firms are profiting by it. Based on what we saw in Lobito and Benguela, this is true not only in Angola's bustling capital, but in the provinces as well. End comment. MOZENA