Mozambique News Agency

No.308, 4th November 2005


Agreement reached on Cahora Bassa

The Mozambican government will finally obtain a majority holding in HCB, the company that runs the Cahora Bassa dam on the Zambezi river, in the western province of Tete, by the end of this year. The agreement came in a memorandum of understanding, signed in Lisbon on 2 November between the governments of Portugal and Mozambique, at the end of President Armando Guebuza's first official visit to Portugal.

The document paves the way to the signing of a final agreement on the transfer of this undertaking, one of the largest dams in Africa, into Mozambican ownership. Up to now, the Portuguese state has held 82 per cent of the shares in HCB, with the Mozambican state holding just 18 per cent.

Under the new agreement, this situation is to be reversed: Mozambique will own 85 per cent of HCB, and Portugal the remaining 15 per cent.

The memorandum was signed by Mozambican Energy Minister Salvador Namburete, and Portuguese Finance Minister Fernando Teixeira dos Santos, in a ceremony attended by President Guebuza and by Portuguese Prime Minister Jose Socrates.

The signing came as a surprise, since as late as 30 October Namburete had been warning reporters that no agreement was yet in sight. "We have been striving to give ourselves a deadline and to work as speedily as we can", said Namburete. "But we are not yet able to predict when the process can be concluded".

What seems to have happened in three days of secret talks is that the Portuguese government decided that good relations with Mozambique are worth more than its stake in HCB. It therefore completely revised the sum of money it is seeking to cover HCB's debts to the Portuguese treasury.

Because of the sabotage of the transmission lines by the then apartheid-backed Renamo rebels during the war of destabilisation, HCB was unable to sell power to its main client, the South African electricity company Eskom for a period of 14 years. Thus the dam did not generate the funds to pay off the debts incurred in building it.

With the additional costs of maintenance throughout the 1980s and early 1990s, Portuguese negotiators initially claimed that HCB's debt to the Lisbon Treasury had reached about €1.9 billion ($2.3 billion).

But finally Portugal has agreed to slash this debt by more than half. Under the memorandum of understanding, HCB will pay Portugal €787.4 million ($950 million). The exact way in which payment will be made is not yet clear.

Speaking at the ceremony, President Guebuza expressed satisfaction at the outcome of the talks, saying "this reveals the good level of understanding and relationship between the two governments and peoples". He noted that "this instrument will allow Cahora Bassa to be returned to the hands of Mozambique in a short period of time".

Announcing the agreement, the Portuguese Prime Minister described it as a "historic event" for both countries. He said the deal expresses mutual trust between Portugal and Mozambique and their peoples, and "it projects a future based on mutual trust for better relationship. It closes a chapter of the past and it opens up to a future of mutual trust and to the potential of bilateral cooperation".

WFP to increase distribution

The United Nations World Food Programme (WFP) has confirmed that 28,800 tonnes of food aid will arrive in Mozambican ports in November and December, enabling it to increase distribution to drought affected areas. However, the situation in many areas is deteriorating and the latest donations do not keep up with growing hunger.

Kerstin Reisdorf from the WFP office in Maputo told AIM that 13,000 tonnes will arrive in Maputo and 15,800 tonnes in Beira.

These deliveries will help WFP meet its plans of supporting 257,000 people that have been hit by the drought, with a further 123,000 people being assisted under the WFP programme for those affected by HIV/AIDS.

WFP is planning a further increase in distribution from 6,500 tonnes in November up to 11,000 tonnes in December, so that it can reach 684,000 people including 534,000 people hit by drought.

This is close to the calculation made by the government's Food and Nutritional Security Technical Secretariat (SETSAN) in May that there were 428,000 people "in extreme food insecurity", and another 159,000 "at risk".

However, a survey carried out in mid-October by the SETSAN's Vulnerability Assessment Group (GAV) estimated that, due to severe drought, about 801,000 people are in danger of "extreme food insecurity". This represents over four per cent of the country's population, living in 56 of the country's 128 districts. These people will be at risk of severe hunger until the next harvest in March.

WFP is facing serious shortfalls across the region, where it is assisting in tackling the humanitarian crisis threatening millions of people in Lesotho, Malawi, Mozambique, Namibia, Swaziland, Zambia and Zimbabwe. WFP is currently 157 million US dollars short of its appeal for 400 million dollars to tackle the crisis until April next year.

Education Minister condemns student strike

Education Minister Aires Aly on 2 November severely criticised the "riotous methods" used by striking students who last month closed down the country's largest higher education institute, the Eduardo Mondlane University (UEM), for a week.

Giving the first official government reaction to the strike, Aly told the Assembly of the Republic, that the methods used by the students "are to be condemned because the channels of dialogue had not been exhausted. Frank dialogue is the best way of resolving differences. Unfortunately, the protestors took a stance that led to disorder".

The strikers' grievances concerned new regulations on scholarships. Aly pointed out that these regulations had been passed in May 2004 by the University Council, on which the student body is represented.

The main change in the regulations was that, in order to renew a full scholarship, the holder would have to pass all his or her subjects each year - previously, students could fail up to 25 per cent, and still receive a full scholarship the following year.

There are about 1,950 scholarship holders at the UEM, which is less than 20 per cent of the full student body.

By putting padlocks on the gates, erecting barricades, and shutting down the university campus, Aly said, the protestors had also prejudiced companies working on the campus that are not part of the university. They too were forced to stop work. "It is unacceptable, in the name of freedom, to limit the freedoms of others", the Minister declared.

"The government wants students who are committed to the national cause", said Aly. "The state cannot finance people who foment laziness, violence and lack of discipline, people who want to live forever as students, and bad students at that". (He was referring to the fact that a high percentage of UEM students do not finish their courses in the prescribed time - usually five years - but often take several years longer.)

Aly restated the government's commitment to expanding the country's universities, and ensuring that people from poorer strata gain access. "We are working for the harmonious development of university education", he stressed. "For that we want students with an impeccable moral and academic attitude, who are committed to the development of the country".

Aly said the government was concerned at reports that certain parliamentary deputies had been advising the striking students. "If this is true, it is to be condemned", he declared. "The representatives of the people should set an example of good conduct. It is not correct to try an make political use out of matters that may degenerate into disorder".

The UEM management has specifically accused two lecturers who are also deputies for the former rebel movement Renamo, Eduardo Namburete and Ismael Mussa, of advising the protestors.

The two deny the accusations, and say they did no more than transport to hospital several students who had been injured in clashes with the police.

Privatised rail in trouble

The policy of leasing out Mozambican railways to private management has failed in two of the three main rail corridors. Answering questions from deputies in the Assembly on 2 November, Transport Minister Antonio Mungwambe said the situation with the railway from Maputo to South Africa was so bad that the government has cancelled the lease.

The lease contract for the line was signed, after years of negotiation, in December 2002 with a consortium headed by the South African rail company Spoornet. Yet the consortium never moved to take over management of the line, or to invest any money in it.

This year, Mungwambe said, the government cancelled the lease, and now the Maputo-South Africa line will be rehabilitated by the Mozambican port and rail company, CFM, on its own, in 2006.

The northern railway from the port of Nacala to Malawi is also a matter of concern, though here the leaseholder, the Nacala Corridor Development Company (SDCN) in which the main foreign partner is the American Railroad Corporation, did at least take over management early this year.

But some of the management decisions alarmed the government - notably the closure of railway stations and the dismantling of the communication system between the stations and the trains. Nor did the leaseholder operate the promised regular service on the branch line between the cities of Cuamba and Lichinga, in Niassa province.

After pressure from the government, SDCN reinstated the communication system, but many stations remain closed. Mungwambe also insisted that passenger trains must stay a reasonable time in each station, to allow passengers to get on and off trains in safety.

SDCN's main excuse is that it does not have enough locomotives. This supposedly made it impossible to run a regular service on the Cuamba-Lichinga line, with only one train to Lichinga in June, one in August, and one in October.

Mungwambe said that four more locomotives arrived in Nacala in September, which should make it possible to ensure that there is at least one train a month to Lichinga.

Due to the poor state of the roads, the easiest, and certainly the cheapest, way of supplying Lichinga has always been by rail. The poor state of the branch line, however, means that the journey is extremely slow.

The Minister stressed that the government is not satisfied with SDCN's performance, and is assessing how the consortium is implementing the clauses of its lease contract. The government now wants SDCN to produce a plan and a timetable for implementing it.

The government can take some comfort from the central rail system, leased to the Indian consortium Rites and Ircon International. Here work, notably on rebuilding the Sena railway from the port of Beira to the Moatize coal mines in Tete province, is advancing according to plan.

Mungwambe also told the Assembly that the problem of the silting up of the entrance channel to Beira port is being tackled, with emergency dredging of the channel to be complete by early 2006.

Investment sought nationwide

In the first six months of 2005, the Mozambican government approved 64 investment projects, 49 of them involving direct foreign investment, Planning and Development Minister Aiuba Cuereneia told the Assembly of the Republic on 2 November.

The proposed projects would involve total investment of about $166 million, and would create around 5,000 new jobs.

Cuereneia was replying to questions from deputies from Renamo who claimed that foreign investment is concentrated in industry and in the south of the country.

The minister stressed that the government wants to attract investment, foreign and domestic, to all sectors of the economy and all parts of the country.

He pointed to plans to set up a "Special Economic Zone" in the northern port of Nacala, to the mining of heavy mineral sands in the coastal district of Moma, to the plans to revive the port of Quelimane, to tourism ventures in Cabo Delgado, Niassa and Nampula, to fisheries projects - particularly fish farming - in Sofala, Zambezia and Cabo Delgado, and to irrigation and agricultural projects in the Zambezi valley. All of these investment projects are in the centre and north of the country.

The government, he added, was also committed to attracting investment by improving the country's transport, communications and electricity infrastructures. He specifically mentioned the rebuilding of the Sena railway from Beira to Moatize in the western province of Tete.

It is this railway that will make viable the huge investments planned by the Brazilian Companhia Vale do Rio Doce (CVRD) in the Moatize coal basin.

Renamo also claimed there was "little complementarity" between mega-projects and "the national economy".

Cuereneia disputed this, pointing out that some 200 other Mozambican companies are now supplying goods and services to mega-projects such as the MOZAL aluminium smelter on the outskirts of Maputo. Nor was it correct to imagine that mega-projects only benefited the area where they are located. Cuereneia argued that the benefits, in terms of the Gross Domestic Product, from MOZAL, or from the SASOL gas treatment plant in Inhambane province, or from the Cahora Bassa dam on the Zambezi, "go to the entire country".

Renamo also attacked the tax exemptions enjoyed by investors, claiming that they damaged the balance of payments, and contradicted the government's stated fiscal policy.

Cuereneia retorted that the opposite was true - by encouraging investment, and the import substitution that investment often produced, the tax incentives had a positive impact on the balance of payments. Nor was it true, as the Renamo written question suggested, that the incentives were only available for foreign investment - they applied to all approved investments, whether the capital involved was national or foreign, and they covered all sectors of the economy except wholesale and retail trade in urban areas.

The government had revised the table of tax exemptions in 2002, and "in due time" it could be revised again. "But we can't do this frequently", said Cuereneia, "otherwise we will give the investors an image of instability".

Interior Minister defends police community councils

Interior Minister Jose Pacheco on 2 November denied claims by Renamo that the Community Police Councils are "a political instrument of the ruling party".

Replying to questions from deputies, Pacheco said that these councils "are not an instrument of Frelimo, but are an organised movement of citizens contributing voluntarily to preventing and fighting against crime".

1,125 community police forums now exist across the country, said the Minister, and the participation of the public "strengthens the relations between the police and the community, and helps reduce the level of crime".

Pacheco claimed that, contrary to common belief, the crime rate is falling, not rising. He said that the number of crimes reported to the police in the first nine months of this year was six per cent lower than in the same period in 2004 (a reduction of about 1,800 reported crimes).

In an implicit criticism of the previous regime at the Interior Ministry, Pacheco said that with the current government many police officers had been removed from desk jobs and put on "operational duties".

The Renamo questions also mentioned the belief that crime is caused by "the proliferation of illegal immigrants and refugees". Pacheco did not accept this. "Refugees have their own statute, and sheltering them is part of international solidarity", he said "It is a duty of all states. We Mozambicans were once refugees, and we were unconditionally sheltered by countries and people that love freedom. That contributed to our independence".

Pacheco also revealed that the police investigations into the murder in December 2003 of Armando Ussofo, director of the Maputo top security jail, are concluded. The case is with the Maputo City Court, and a trial is awaited. Pacheco did not say how many people have been charged - in the weeks following the murder four people were arrested.

He said that investigations into the 2001 murder of economist Antonio Siba-Siba Macuacua, interim chairman of the crisis-ridden Austral Bank at the time of his death are continuing. This case was complex because of its "international connections".

Government imports new buses

The Mozambican government is investing about $6 million in importing buses for Maputo's publicly owned bus company, TPM. Initially 70 new buses will be imported and are expected to arrive before the end of this year.

Currently TPM is working with about 30 functioning buses, which nowhere near meets the needs of the 1.5 million inhabitants of the Maputo-Matola conurbation.

TPM has come under sharp criticism from the travelling public, and from its own workforce. Every three months the state gives it a subsidy of 7.5 billion meticais (about $288,000).

The company has a workforce of 700 and it criticised for being grossly overmanned, with 23 workers per operational bus. Even if the repairs and acquisition of new vehicles pushes the total number of buses on the Maputo roads up to 120, that will still be almost six workers per bus.

Following allegations by workers of misuse of company funds, an independent audit as ordered of the TPM accounts. The results have not yet been made public.

Scientific Energy Council established

The continuing rise in the price of petroleum products makes it crucial for Mozambique to investigate other sources of energy, declared the Minister of Science and Technology, Venancio Massingue, in Maputo on 31 October.

Speaking at a ceremony where members of a new body, the Scientific Energy Council, were sworn into office, Massingue said "Energy is a fundamental resource for the country's development. The current world context of systematic increases in the price of liquid fuels makes it crucial to discover and consolidate new forms of energy - such as solar, wind and geothermal power".

The new Council consists of nine members chosen because they represent relevant institutions or because of their own recognised scientific expertise. The council's chairperson is Carlos Lucas, a lecturer at the country's largest institution of higher education, the Eduardo Mondlane University.

Massingue said that his Ministry is committed to setting up and making operational the various thematic scientific councils envisaged in the government's five year programme. He added that the advance of science and technology is one of the most extraordinary achievements of humanity.

The Scientific Energy Council will advise the government on development strategies in the energy field, and promote research and innovation in this area.

Among the basic tasks of the Council are to draw up a strategic vision for scientific and technological development in all matters concerning energy, and to identify promising research areas that could have a major impact on sustainable development and poverty reduction.

This is the second Scientific Council set up under Massingue's ministry. The first was the Scientific Water Council.

Government finalising contracts for water projects

The Mozambican government, through the Public Works Ministry, is finalising negotiations with contractors to work out projects to build 20 small dams in Gaza, Inhambane, Sofala, Manica and Tete provinces, to minimise the shortage of water in areas prone to drought .

Public Works Minister Felicio Zacarias gave this information on 26 October during a meeting of his sector's Consultative Council in Beira.

The government's target, he said, was to increase the number of people in rural areas with access to safe drinking water from the current figure of 40 per cent to 55 per cent by 2009. In urban areas, he put the current coverage rate for clean water at a surprisingly low 36 per cent - it was planned to raise this to 60 per cent in the next four years.

As for basic sanitation services, coverage should rise from 33 to 40 per cent in rural areas, and from 47 to 55 per cent in the towns.

Zacarias did not put a price on this expansion, but he said these increases will make a valuable contribution to achieving the Millennium Development Goals adopted by the United Nations in 2000. One of these goals is to cut by half, between 1990 and 2015, the number of people without sustainable access to safe drinking water.

Achieving the government's targets, said Zacarias, meant building new water sources, repairing those that were out of operation, setting up a network selling spare parts for pumps, and involving local communities in building and maintaining water sources.

Turning to recent success stories, Zacarias said the companies that will rehabilitate and expand water supply systems in the southern towns of Inhambane, Maxixe, Xai-Xai and Chokwe have now been chosen. Their work would increase the amount of water treated in the four cities by about 20 million cubic meters a day,

He also said that his sector has built new water supply systems in Quelimane and Nicoadala, in Zambezia province, and a new water treatment centre on the Pungue River, set to supply water 24 hours a day to the residents.

Zacarias added that similar actions are taking place in the northern Nampula, as an effort to ensure water supply to those area not yet served. This has already been done in Pemba, the capital of the northern Cabo Delgado province, where wells have been also opened.


Prison director assassinated

A group of four unidentified gunmen shot and killed the director of the Maputo Central Prison, Jorge Microsse, on 21 October. The murder occurred in the Pequenos Libombos area of Boane district, about 40 kilometres west of Maputo. The assassins opened fire on Microsse's car. He was giving three people a lift, and they all escaped unharmed - which may indicate that the killers knew exactly who their target was.

The motive for the murder is not known, but several months ago Microsse had told reporters that he had received death threats because of his work at the prison. Microsse had made enemies by suspending some prison guards whom he believed were conniving in the escape of prisoners, particularly in a mass break-out of some 20 prisoners in mid-May.

At the time, Microsse said that corrupt staff wished to take revenge against him because he had cut off their source of income: he said that they used to receive money from prisoners, who paid them to issue false release papers, or merely to look the other way while they escaped.

This is the second assassination of a high-profile prison director. On 15 December 2003 armed men murdered Armando Ossufo, director of the Maputo top security jail, at a petrol station in the Maputo suburb of Xipamanine. Although four arrests were made in the ensuing weeks, no trial has yet been held.

This is a condensed version of the AIM daily news service - for details contact

Mozambique News Agency

c/o 114 Stanford Avenue Brighton BN1 6FE UK.

Tel: +44 (0) 7941 890630,

email: Mozambique News Agency

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