Narrative
Full Description
Project narrative
In 2004, China Eximbank and the Government of Angola signed a $362 million loan agreement for the 1,344 km Benguela Railway Rehabilitation Project. The borrowing terms of this loan are unknown. The project involved the rehabilitation of a 1,344 km railway project that run from Lobito in western Angola to Luau in the Democratic Republic of Congo. The railway has 67 stations, 35 bridges, and allows for trains to reach peak speeds of 90 km/hour. Upon completion of the project, it was estimated that the railway would be able to accommodate 4 million passengers per year and 20 million tons of cargo per year. Eventually, the Benguela Railway is meant to connect to the Anzan Railway, the Tanzania-Zambia Railway and the surrounding national railway networks to create an interconnection of the southern African railways and form a large international railway passage from the Atlantic Ocean to the Indian Ocean. China Railway 20th Bureau Group (CR20), a subsidiary of China Railway Construction Corporation, was the contractor responsible implementation. Construction began on January 6, 2006 and was originally expected to reach completion by the end of 2007, according to a contemporaneous U.S. Embassy cable released by WikiLeaks. However, CR20 did not complete the project until August 2014, with the railway initially opening to traffic on February 14, 2015. On July 27, 2017, the railway line was provisionally delivered to the appropriate Angolan authorities and passed temporary inspection, marking the completion of all of CR20's tasks. The completed railway was officially handed over to the Angolan authorities on October 3, 2019. The Ministry of Transport of Angola, the Benguela Railway Company, and CR20 jointly signed the final acceptance certificate for the project at that time. Chinese officials blamed the project delays in part on the constant danger from leftover land mines littering construction sites. In January 2024, Benguela Railway Company -- a state-owned company that operates Benguela Railway and reports to the Angolan Ministry of Transport and Ministry of Economy and Planning -- told the Wall Street Journal that '[s]hoddy Chinese work and Angolan maintenance along the [...] railroad connecting Angola’s Atlantic Ocean port of Lobito to mineral-rich Congo have left stations run down, safety systems on the blink, computer servers dark, phone lines disconnected and trains prone to tipping off the rails.' Two years earlier, in 2022, the Government of Angola rejected a bid by CITIC -- a Chinese state-owned company -- to re-rehabilitate and operate freight service along the Lobito Corridor line. Instead it granted a 30-year concession to a U.S.-backed European (Swiss-Portuguese-Belgian) consortium that promised to carry millions of tons of green-energy minerals such as copper, manganese and cobalt from Congo to Angola’s Atlantic coast. Julien Rolland, a senior executive at Trafigura, a commodity-trading giant based in Switzerland and Singapore and partner in the winning consortium, told the Wall Street Journal that '[w]hen we competed for this tender with Citic, they were very convinced they would win. [...]' and 'when they lost, they got pissed off so they said they were dropping out of [a separate Angolan government concession to operate Lobito’s container port].'
Staff comments
1. The Portuguese project title is Caminho de Ferro de Benguela or Caminho-de-Ferro de Benguela. The Chinese project title is 本格拉铁路正 or 本格拉铁路项目 or 本格拉铁路修复项目. 2. The project may have been partially financed by a China International Fund (CIF) loan facility (see Record ID#54 and "Diversification and Development, or 'White Elephants'? Transport in Angola’s Lobito Corridor," p. 5). CIF initially agreed to finance the construction of both the Luanda and Benguela railways in 2005, but subsequent delays in construction due to disputes between CR20 and Angola administrators may have led to a change in the financing arrangements (See: "Progress in reconstructing the rail network is slow"). 3. The total cost of the project was $1.83 billion, but it is not clear how the Government of Angola funded the portion of the project that was not supported from the proceeds of the China Eximbank loan. (See: 中国海外修最长铁路通车 实现南部非洲铁路互联互通 and 金融时报：进出口银行立足专业优势 续写中非经贸合作“未来篇 and 进出口银行副行长谢平: 聚焦中非发展 助力中非合作 and 金融时报：进出口银行倾力支持 助推非洲路通业兴 and RELATÓRIO DO ESTUDO DO IMPACTO DA PLENA PARTICIPAÇÃO DE ANGOLA NA ZONA DE COMÉRCIO LIVRE DA SADC SOBRE A CAPTAÇÃO DE INVESTIMENTO DIRECTO, p. 32 and 中国铁建修建完成最长海外铁路通车运营 and Chinese company completes restoration of Benguela railway and DBS Group Research on BRI July 2017, p. 4 and Diversification and Development, or “White Elephants”? Transport in Angola’s Lobito Corridor, p. 18 and Progress in reconstructing the rail network is slow). This issue warrants further investigation.