Transport

Quite a Corridor

Nacala

Nacala, located on the coast of Nampula Province in northern Mozambique, is currently the focus much attention, with plans underway to turn the city and its surrounding region into a […]

Nacala, located on the coast of Nampula Province in northern Mozambique, is currently the focus much attention, with plans underway to turn the city and its surrounding region into a major air, rail, and marine transport hub for southeastern Africa. The city has a population of around 225,000, and has long served as an important port for northern Mozambique and its landlocked neighbor Malawi. Now, a combination of public and private sector investors are developing a number of projects to expand the port and rail capacity of the city, which serves as the terminus of the Nacala Railway, and to upgrade the airport.

NACALA LOGISTICS CORRIDOR

Nacala Port, at a depth of 14 meters, is the deepest natural port in Southern Africa and the third deepest on the eastern coast of Africa. The port is Mozambique’s third busiest, after Maputo and Beira, which are the busiest and second busiest, respectively. Nacala Port is also the terminus of the Nacala Railway, which extends 931 kilometers west into landlocked Malawi, connecting to Malawi’s Central East African Railway. As such, Nacala Railway and Nacala Port (together known as the Nacala Corridor) have long been strategic for both Malawi and Zambia (further to the west), which rely on the port as an outlet to the Indian Ocean. The inland rail link was initially completed in the 1960s as a way of providing Malawi with a more direct outlet to the sea. However, the struggle for independence in the early 1970s and the war of destabilization during the 1980s destroyed much of the country’s infrastructure, and led to a sharp reduction in use of the corridor.

As with much of the recent development in Mozambique, the current upgrading of Nacala’s port and rail facilities has been driven by the needs of the coal industry. The remote hinterland location of Mozambique’s coalfields in the Moatize Basin in Tete Province, which is in the northwest of the country, has presented major logistical challenges for companies looking to export coal. Currently, the Sena Railway Line, which runs from Tete Province to the Port of Beira in Central Mozambique, is the sole rail link between the Moatize Basin and the Indian Ocean. The line currently has an annual capacity of 6 million tons, which falls far short of the country’s goal of exporting 120 million tons of coal annually by 2020.

A number of port and rail upgrades are either being planned, or have already begun in order to increase the country’s coal export capacity. The projects are being financed and managed jointly between the major coal companies, international donors, and the government. The largest, and soonest to be completed, among these is the upgrade of the Nacala Railway and the construction of a new coal terminal at Nacala-a-Velha (across Bengo Bay from Nacala City). The project is being managed by Corredor Logistico Integrado de Nacala (CLIN), a joint venture between Brazil’s Vale (80%), currently the biggest player in developing Mozambique’s coal reserves, and the Ports and Railways of Mozambique (CFM) (20%), the parastatal authority that manages Mozambique’s ports and railways. In total, Vale will spend (through CLIN) around $4.4 billion on the project. The terms of the agreement state that in the later phases of the project, CFM will increase its stake in CLIN to a maximum of 50%. The upgrade is due to be completed by 2017.

NACALA RAIL LINE

The rail portion of the Nacala Corridor upgrade involves a few different segments running from the Moatize Basin in Tete, northeast through Malawi, and continuing east into Mozambique and directly to the new port at Nacala-a-Velha. In total, according to Ricardo Saad, Vale’s Project Director for Africa, Asia, and Australia, there are 600 kilometers of line being upgraded and 250 kilometers of new line being built.

Starting in Tete, 139km of new railway will be built running from Cambulatsissi in the Moatize Basin, across the border, through Chikwawa and northeast to Nkaya, where it will meet Malawi’s Central East African Railway (CEAR). From Nkaya, the 99 kilometers of existing line running eastward to the border at Nayuci will be upgraded. At Nayuci, the line connects to Mozambique’s existing Nacala Line, which extends 618 kilometers eastwards to Nacala. This portion of the line will also be upgraded, and a spur will be constructed at the Nacala end of the line to connect directly to the new coal terminal being built in Nacala-a-Velha. In total, the rail line will be able to handle 40 million tons annually, 30 million of which will be reserved for use by Vale. Saad has told TBY that Vale’s current aim is “to reach a minimum 22 million ton capacity annually by 2017.” Vale has been keen to emphasize that its investment in infrastructure for the region is “inclusive.” Saad told TBY, “the one critical aspect of the Nacala Railway Line investment is the inclusiveness of the project. It is not exclusively dedicated to coal, not even for Vale.”

PORT OF NACALA

Also underway is the upgrade of Nacala’s port. The main port upgrade will be funded through a loan from Japan, with the coal terminal funded by Vale. Prior to the beginning of the upgrade, the Port of Nacala had a general cargo terminal with four berths, capable of handling 2.4 million tons of cargo annually; a container terminal capable of handling 45,000 TEUs annually; and a liquid bulk terminal for fuel oil and vegetable oil. When the upgrade is completed in 2019, the port will be expanded to three times its current size, with a general cargo capacity of 4.7 million tons and 234,000 TEUs. It is also estimated that the port will be able to handle 29 TEUs per hour per ship, up from the current 24. The upgrade will include the construction of a new coal terminal, which, once completed, will have a capacity of 25 million tons of coal annually. The terminal is expected to have an initial capacity of 18 million tons by December of 2014, when the first coal exports are set to begin.

NACALA AIRPORT

Nacala’s airport, previously a small military airstrip, is also being upgraded, with the goal of turning Nacala into a major international air travel hub for southeastern Africa. The upgrade project, which is being carried out by Brazil’s Odebrecht, began in 2011 and is scheduled for completion in June 2014. Most of the $114 million cost of the upgrade is being funded through a loan from the Brazilian development bank Banco Nacional de Desenvolvimento Economic e Social (BNDES). The upgrade will include repaving the runway, which will be 3,400 meters long and capable of receiving Boeing 757 and 767 aircraft. Once upgraded, the airport will have an initial capacity of 500,000 passengers with plans to eventually expand to 1 million annually.

Emanuel Chaves, CEO of Aeroportos de Moçambique explained to TBY in an interview that, while Maputo is too close to Johannesburg to be a viable hub airport, Nacala is perfectly located halfway between Johannesburg and Nairobi. Said Chaves, “our aim is to make Nacala an important hub in the future. Perhaps in 20 years it will have even superseded Maputo.” In the long term, Mozambique hopes that with further upgrades, the airport will be suitable to receive long-haul aircraft such as the Airbus A340.

With the combination of transport upgrades and a new special economic zone, Nacala is predicted to become a major hub for the region. As Ricardo Saad told TBY “Nacala is poised to become an economic platform, not only for Mozambique and Malawi, but also the Southern African Development Community (SADC). That certainly makes it an important economic and development platform for the region itself.”

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