China’s CHEC involved in investment of US$1 billion in the new port of Maputo

25 April 2016

An international consortium, which includes the port company China Harbour Engineering Co, is projecting an investment of US$1 billion in a new port in Maputo province, to serve Mozambique and neighbouring countries, including South Africa.

The project for the deep water port of Techobanine in Matutuíne district, southern Maputo province, is being promoted by a consortium led by Mozambican company Bela Vista Holdings (BVH) that in addition to CHEC, inckudes South African public rail company Transnet, according to weekly newspaper Savana.

Mozambique and Botswana initially agreed to this project in 2010, providing total financing of US$7 billion, the construction of 1,100 kilometres of rail link, with capacity to process 200 million tons of cargo per year, ranging from general bulk to ores, fuel and passengers.

In 2011, Zimbabwe joined the project, through a memorandum of understanding providing financing from the private sector and concession of infrastructure and the following year the master plan of the project was completed and a public tender was launched to select a company responsible for economic viability studies.

Weekly newspaper Savana wrote that the plans are underway for construction of the port “which may somewhat ease the pressure on the port of Maputo and offer more competitive options for access to international markets by some Southern African countries.”

“As this is a category A project, this development will be subject to a full environmental impact study, which will result in a plan for its management, supported primarily by the project”, a source close to BVH told the newspaper.

An international consortium has already completed the preliminary environmental impact studies and, in response to its recommendations, the project’s promoters have decided to choose a location that is 23 kilometres from the Maputo Special Reserve for the location of the port at Ponta Techobanine.

The port’s construction works will consists of opening a 3.5-kilometre access channel, an industrial free zone, among other complementary facilities.

The new port will facilitate and diversify access to the sea to some countries in the region, such as Botswana, Swaziland and Zimbabwe, as well as shorten the distance to the coast from mining regions within South Africa.

A rail link through Swaziland, along the Maputo River, could help to significantly reduce transportation costs of ore produced in South Africa, “allowing for it to be placed on the Asian market at competitive prices,” the newspaper said.

The East African coast is one of the areas included in the Chinese business strategy of the New Silk Road, which will support the creation of new infrastructure and industrial areas.

China has taken on an important role among Mozambique’s main foreign partners and most analysts expect that role to increase.

“We expect that the involvement in the Mozambican economy of companies from Brazil, India and China will strengthen ties with these countries,” said the latest report on Mozambique from the Economist Intelligence Unit (EIU).

The China Harbour Engineering Co. is already in charge of the works of the new port of Beira, which began in September 2015.

This infrastructure in the second largest city in the country is seen as key to revitalise the country’s fisheries industry and is prepared to serve the entire production chain, including refrigeration and export of processed products.

In March an investment of US$6 billion in a 2,600-kilometre pipeline, the feasibility study for which will be carried out by the China Petroleum Pipeline Bureau (of the China National Petroleum Corp., a shareholder in area 4 of the Rovuma basin).

Once the investment decision is made, 70 percent of the funding will be the responsibility of Chinese financial institutions, according to the agreement. (macauhub/CN/MZ)