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Cablegate: It's Not Just Luanda: Development in the Provinces

P 291634Z OCT 08
FM AMEMBASSY LUANDA
TO SECSTATE WASHDC PRIORITY 5133
INFO SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE

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

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