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7/1/2003



Rail News: Rail Industry Trends

RDC-led consortium receives $29.6 million from Overseas Private Investment Corp. for African port/rail project


During the past 15 years, Railway Development Corp. (RDC) has developed a reputation as a deal-maker within emerging railway markets. Last week, the Pittsburgh-based railway management and investment company continued to build on that legacy.



In a June 27 signing ceremony in Washington, D.C., officiated by U.S. Secretary of State Colin Powell, an RDC-led consortium and the Overseas Private Investment Corporation (OPIC) executed an agreement to complete a transaction that would create the first regional integrated port/railway transportation system for Malawi, Mozambique and Zambia.



In the works since 1999, the agreement initiates the closing process whereby OPIC has pledged $29.6 million to finance the project.



The successful completion of this project would help the signatories to "significantly enhance their agricultural productivity and exports through increased access to expanded rail and port facilities, and provide a more direct, and less costly, means of transporting essential food aid to famine-stricken countries," according to a joint prepared statement. The project also would serve as "tangible and long-term demonstration of U.S.-Africa economic growth in the region," and would "contribute humanitarian cooperation in times of need," the signatories said.



In addition to RDC, the consortium comprises Edlow Resources Limited (ERL) (Bermuda), MANICA (Mozambique), Mozambican private investors and CFM (Mozambique's Port and Railway administration). The consortium formed a new company — Corredor de Desenvolvimento do Norte S.A.R.L. — to operate and manage the port and railway for the 15-year concession.



The project involves rehabilitating a 48-mile line section between Cuamba and the border with Malawi at Entre Lagos; completing infrastructure work for Malawi to improve drainage and reduce line interruptions during the annual rains; and refurbishing the Port of Nacala, the east African coast's largest natural deep-water port.



The Nacala Corridor consists of Mozambique's Port of Nacala and Northern Railway network, and Central East African Railways (CEAR), Malawi's railway system. The consortium has operated the Nacala Railway and Mozambique's port and railway network since 2000; CEAR, since late 1999.



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