Angola’s ghost railway
It was meant to be a game changer for the region, an artery for exporting minerals from the DRC through Lobito, the closest port to Europe and Asia. But there’s very little to show for all the money spent on it
On Angola’s border with the Democratic Republic of Congo (DRC), on the eastern bank of the Luau River, the 1,348km Caminho de Ferro de Benguela (CFB) railway line — which was meant to be revived in a huge Angolan project — ends in a tangle of rusted rails and weeds.
"No pictures allowed here. It is a strategic point of infrastructure," the commander of the border police unit of the motor bridge over the river tells the Financial Mail.
The bridge was blown up in 1978 by Mobutu Sese Seko to stop an Angolan-backed secession of Katanga from the then Zaire. It has since been rebuilt as a two-span military emergency bridge. It cannot carry more than 40t — less than a standard 50t military tank.
The CFB railway line from the Atlantic to Luau ends at two monuments: one dedicated to Angolan President José Eduardo dos Santos and his Zambian and DRC counterparts at its reopening in February 2015; the other to Sir Robert Williams, the Scottish engineer who built the first rail link between Lobito and Elizabethville (today’s Lubumbashi) between 1899 and 1929.
From Luau, the CFB railway line was meant to connect with a branch of the Katanga railway. It was intended to be a game changer for the region, a potential artery between the DRC’s landlocked mineral-rich Katanga province and Angola’s revamped deep-water harbour at Lobito. But it’s a promise yet to be realised, a casualty of Angola’s crippled economy.
Historically, the shortest route between Katanga’s minerals and Europe ran through Lobito. From 1965 to 1974, before the Angolan civil war halted the export of copper, the CFB line was briefly the world’s most profitable. Then, in 1978, Angolan rebels stormed across the Luau and occupied Katanga as far east as the main copper mines. It cost Mobutu three years and millions spent on mercenaries to expel them.
In recent years, revamping this railway has been Dos Santos’s dream. In the 1980s, his government even issued a glossy book to woo investors to rebuild the CFB line.
It shouldn’t be a hard sell. After all, Katanga’s enormous copper deposits, which contain as much as 40% of the world’s arsenic-free deposits, were famously called "a geological scandal" by early geologists. Today, Katanga’s mines supply 50% of the world’s cobalt, and there are immense deposits of iron, manganese and nickel. Katanga’s mineral wealth makes up more than 70% of the World Bank’s estimate of the DRC’s mineral wealth of US$35 trillion.
This is why the CFB line, which was to be rebuilt by the Chinese Railway Engineering Corp under a 2004 oil-for-infrastructure deal, is key to Angola’s economic plans.
The World Bank has lent $300m to the Congo Railway Company to fix the DRC side of the line, but that is yet to be completed.
The revamped railway would have connected Angola to the rest of the Southern African rail network for the first time in 40 years, creating a development corridor for regional trade.
To capitalise on the railway, Angola’s national oil company, Sonangol, and Brazilian construction company Odebrecht planned to build an $8bn, 200,000 barrel/day oil refinery in the hills above Lobito harbour. Quite what happened to this plan is anyone’s guess: only an office, accommodation blocks and a soccer field were ever built.
Also, Palanca Cement, co-owned by Sonangol CEO Isabel dos Santos (the president’s daughter) was to erect a new cement plant next door. But in 2015, Palanca’s Portuguese-Brazilian partner, Banco Espírito Santo’s commercial investment arm (the banker to the Dos Santos family) was closed down by European bank regulators after $5bn disappeared in the form of bad loans.
Visit the site where the mooted $50m cement plant was supposed to have been built and all you’ll see is an abandoned shipping container and a pile of trash.
Dos Santos’ plans for the region are nowhere more clear than at the glistening new Luau International Airport, 12km outside town. When the Financial Mail visited, the control tower was deserted and the subtropical heat had cracked several of its tinted, double-glazed windows. A lone staff member could not recall the most recent flight after Dos Santos inaugurated the airport in late 2015.
Luau itself also hasn’t developed. When the Financial Mail was there it had no electricity; the Chinese-made generator was silent after the town had run out of diesel for it a month earlier.
Locals blame the Congolese black market for the absence of fuel. "Whenever a road tanker of fuel arrives from Luanda, the Congolese buy it all from the driver and smuggle it across the river. Now we have to pay Congolese prices for our own fuel," fumes the local manager of trucking firm Unicargas.
The Congolese charge three times what fuel costs in Luau.
The deeper problem with the CFB, and with much of Angola, is that the economic crisis of 2015 brutally exposed the image the country had created for itself.
"Angola is a place where everyone knows the price of everything but the value of nothing — and now we’ve discovered that without dollars, we are nothing," says Katia Airola, a retired senior civil servant in Luanda.
The economy has been paying the price for the ruling party’s petro-cronyism: without US dollars to pay for foreign expertise, the entire Angolan construction industry has been at a complete standstill for two years.
Ambitious plans for the CFB fell victim to the hubris of politicians buoyed by high oil prices and held together by the byzantine palace politics of "O Futungo", as Dos Santos’s presidential home in Luanda is called.
It all fell apart, in a country where, between 2004 and 2014, GDP growth climbed 17%/year and high oil prices brought earnings of $5bn/week. Gleaming skyscrapers in Luanda rose like mushrooms, and restaurants thronged with foreign workers. By late 2012, 250,000 Chinese had moved to Angola, lured by the easy dollars.
But a crackdown on corruption in China under President Xi Jinping triggered the collapse in the post-2008 commodity supercycle. Angola’s oil-for-infrastructure deal with China, clinched when oil prices were more than $100/barrel, left Luanda reeling as prices dropped to the low $40s.
Even Sonangol was affected. "They just stopped paying [us]. First they made some excuses; but after months of calls and meetings [with them], they still have not paid," says a former bookkeeper of an engineering firm that has since left Angola, still owed millions.
The central bank, the Banco Nacional de Angola, was unable to fully meet its cash calls because it was not receiving any dollars from Sonangol. This led to international banks halting the sale of US dollars to all Angolan banks.
Officially, the novo kwanza (NKz) currency is pegged at 16 to the dollar, but because there’s not enough forex available to meet demand from importers, the black market rate plunged to NKz50 before stabilising at about NKz35. Inflation hovers at about 40%.
Fuel, once cheaper in Angola than elsewhere in sub-Saharan Africa, has become scarce and now costs five times what it used to. New car sales fell by 80% in 2016; every boutique in Luanda is offering discounts of 50%; and bread has soared from NKz5/roll to NKz50. The supermarkets are still well stocked, but only a handful of people can afford their prices.
In the informal markets, where most people still shop for food, prices have also gone up due to the fuel shortage. Though the fertile highlands of Huambo could easily feed the dry coastal area, the deteriorating road infrastructure means the trip to Luanda, which previously took four hours, is now a nine-hour, bone-jarring ordeal.
In this context, a fully functioning CFB seems a pipe dream. For one thing, it has emerged that there are a number of technical design flaws that render the project economically unfeasible.
First, eight of the specially designed Chinese locomotives bought to haul the train up the steep climb from Lobito to Huambo all broke down irreparably after just two years in service. Spare parts are astronomically expensive, and the government has instead opted for refurbished General Electric units to replace them, but the couplings have to be modified first — a difficult task in a country where technical skills are scarce.
Second, there are major problems at three (of 29) railway bridges en route to Huambo that were heavily mined during the war. Over the past two years, that section has remained closed.
Third, the Chinese locomotives are too long for bends in the line, causing trains to derail if they exceed anything but a snail’s pace at such sections, according to an engineer. "If they go faster than 10-15km/hour the train jumps off the rails there," he says, speaking on condition of anonymity.
Fourth, the Chinese allegedly cheated on the length of rail sidings in each of the 87 stations they constructed between Huambo and Luau to allow trains to pass each other along the single line. This means no passenger service and cargo train can operate at the same time.
"The way the whole line is built now, no-one will ever be able to make it financially viable," says the engineer.
The Chinese got away with it, he says, because there were no qualified Angolan engineers to spot the design problem.
All is not completely lost, however. The CFB has provided desperately needed transport for the small communities clustered around every station.
The single cargo wagon is packed to the roof with dried fish and other food, and the train has become a moving market. Local traders use the Luau link to move their produce into the DRC and, when fuel is available, send food to the diamond-producing region of the Luanda Norte province.
But with the ailing Dos Santos spending more time in Spain’s hospitals than at home, the ambitious rail project seems destined to remain a very expensive, made-in-China white elephant.
* The writer’s research in Angola was funded by the EU Journalism Fund