The long awaited rail rehabilitation deal signed by the government of Malawi and new owner of Central East African Railways (Cear) would see the country’s good now going and coming by rail using Beira port.
The government put pen to paper on Thursday in Lilongwe with Vale Mining of Brazil that to reconstruct the rail-line from Moatize to Limbe and troubled the battered 77 kilometre stretch to Nacala.
The deal, which was proposed in 2006 and had to wait for shareholding restructuring in Mozambican Ports and Railways Company (CFM), is worth $2 billion.
Ministry of Transport’s Director of Planning Victor Lungu said continued change of ownership in Cear has delayed the conclusion of the review of the agreement between the company and the Malawi government which started in 2007.
“The review of the concession in Malawi is still going on. We will now continue with the review of the agreement to accommodate some changes which we feel are necessary to ensure a fair deal on the matter,” said Lungu.
The ministry said implementation of the rehabilitation would span 3 years and Malawi would be collecting revenue worth $8 million per annum in concession fees from the Vale Mining.
Vale’s interests include coal mining at Moatize in Mozambique’s Tete Province and they have already constructed the railway from the are to Beira.
A source who is familiar with Malawi-Mozambique transport systems said in an interview that the deal present several advantages.
“If technocrats and politicians from Malawi are shrewd enough they could now cut their transport costs from and to Beira by utilising the railway rather the the trucks on the road because with rail you can carry tens of truck-loads at a go. Malawi’s transport costs that are always high can go down by over 40 per cent. It just require a quick thinker to have this work to their advantage,” said the source.
The railway line will pass from Moatize through Chikwawa to Nkaya in Balaka and rehabilitation of the existing railway line from Nkaya to Nayuchi, a total distance of 238km in Malawi.
Once the required rehabilitation is undertaken, a train would only take 38 hours to travel between Nacala and Limbe at an average speed of 50 to 70 kilometres per compared to the present when it takes 5 to 7 days with the train travelling at 15 to 20 kilometres per hour.
Minister of Transport Sidik Mia signed the concession agreement on behalf of Malawi Government and it was witnessed by Minister of Foreign Affairs Peter Mutharika. Vale’ Paulo Horta co-signed the agreement.Follow and Subscribe Nyasa TV :