VZCZCXRO1940
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHLU #1210/01 3210924
ZNR UUUUU ZZH
R 170924Z NOV 06
FM AMEMBASSY LUANDA
TO RUEHC/SECSTATE WASHDC 3481
INFO RULSDMK/DEPT OF TRANSPORTATION WASHDC
RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHSO/AMCONSUL SAO PAULO 0015
RUEHJO/AMCONSUL JOHANNESBURG 0410
RUEHTN/AMCONSUL CAPE TOWN 0320

UNCLAS SECTION 01 OF 03 LUANDA 001210 
 
SIPDIS 
 
SENSITIVE, SIPDIS 
 
STATE FOR AF/S; EB/IFD/OMA and EB/CBA 
JOHANNESBURG FOR USFCS and USTDA 
CAPETOWN FOR USFCS 
DEPT PLS PASS EXIM BANK 
DOT FOR CONNIE HUNTER 
 
E.O. 12958 
TAGS: ETRD BEXP EAIR EFIN AO
SUBJECT: ANGOLAN TRANSPORT MINISTER DISCUSSES PLANES, TRAINS AND 
AUTOMOBILES 
 
LUANDA 00001210  001.2 OF 003 
 
 
BUSINESS SENSITIVE - NOT FOR INTERNET DISTRIBUTION 
 
REF: Luanda 1197 
 
¶1. (U) This is an Action Request.  TDA, EB and AF/S please see para 
¶13. 
 
¶2. (U) Summary. Angolan Minister of Transportation Andre Luis 
Brandao and the GRA are pleased with the arrival of the Boeing jets 
to Luanda.  While interested in US quality locomotives for purchase 
for the Angolan rail system, Brandao appeared frustrated at the lack 
of USG-backed financing available for rail systems.  Finally, he 
requested USG help in providing technical assistance in developing a 
strategic plan for Angolan highway expansion and for technical 
capacity building in highway safety and hazardous spill clean-up. 
End Summary. 
 
¶3. (U) Coincident to the arrival of the five Boeing jets, Ambassador 
Efird and P/E Chief met with Angolan Transport Minister Andre Luis 
Brandao on November 9, 2006, to discuss developments in civil 
aviation; plans for rehabilitation of the national rail lines; to 
formally advocate, as requested through a USDOC advocacy request, on 
behalf of General Electric's bid to rehabilitate locomotives, and to 
discuss plans for the reconstruction and expansion of the Angolan 
highway network.  The Boeing planes' arrival is detailed in reftel. 
 
--------------------------------------------- ----- 
Boeing Purchase - A Catalyst in TAAG Modernization 
--------------------------------------------- ----- 
¶4. (SBU) Minister Brandao commented on how pleased Angola is to 
receive the new planes on its Independence Day.  He added the 
Angolan National Airline had always flown Boeing and planned to 
maintain that tie.  He noted the last 737 will arrive in early 2007, 
allowing TAAG, the national airline, to expand operations 
dramatically.  In addition, he discussed the September ouster and 
replacement of TAAG's board of directors, noting that the old 
administration had concentrated just on the new purchase and not on 
the company restructuring necessary to accommodate the maintenance 
and servicing of the additional planes and its expanded flight 
plans.  (Note: Angolan Finance Minister Pedro de Morais had held up 
the sale for several months pending a restructuring plan what would 
make TAAG profitable.  Implementation of the plan has been delayed 
by threatened labor actions in response to required layoffs.) 
Brandao added that under the old TAAG direction, there were no 
flight crews in place and the technicians "couldn't have managed to 
fix a flat tire if one had occurred."  Brandao said the new board 
had concentrated on remedying this situation and while there were 
still some kinks to be worked out, he hoped the planes would be 
flying by the end of the week of November 12th.  He said the GRA 
would like to take advantage of Boeing's expertise to discuss 
further restructuring of TAAG operations.  He also noted that it was 
important for Angola to focus on Open Skies, noting that Angola 
could follow the Cape Verde experience. 
 
¶5. (U) Ambassador Efird commented Boeing was not only selling 
aircraft but providing significant technical assistance as well, 
including evaluating the safety of all the airports in Angola in 
conjunction with its sale in moving towards Safe Skies.  She noted 
other assistance and other training Boeing was providing as well. 
Brandao said that the GRA had issued contracts to begin 
rehabilitating all the airports in Angola and had stepped up its 
technical training.  Ambassador Efird urged the Minister to continue 
to work on necessary security upgrades with the Embassy, Boeing, 
Connie Hunter of DOT and TDA. 
 
--------------------------------------------- --- 
Rehabilitating Angola's War-Damaged Rail System 
--------------------------------------------- --- 
¶6. (SBU) Ambassador Efird then raised the rehabilitation of the 
railways in Angola, strongly advocating on behalf of General 
Electric and its bid to overhaul twelve locomotives for the Luanda 
and Mocamedes Railways and to modernize twenty-one locomotives for 
the Benguela railway.  (Note: Mocamedes is the railway running 
through the southern provinces of Angola.)  Minister Brandao said 
the GRA had already purchased some locomotives from India for the 
Mocamedes line and from China for the Luanda line on a trial basis. 
He said that the GRA believed the US-made locomotives and engines 
were of high quality but in this case, after initial interest, GE 
had not followed up on negotiations for the sale.  (Comment: GE 
formally filed an advocacy request for Embassy Luanda assistance in 
promoting its bid for overhaul of Angolan locomotives.  GE has made 
several visits to Angola and recently hosted a large exhibition of 
 
LUANDA 00001210  002.2 OF 003 
 
 
projects and services of many of its divisions.) 
 
¶7. (SBU) The Minister raised the issue of financing for the 
railways, noting that he had spoken to EXIM Board Member J. Joseph 
Grandmaison when Brandao was in the U.S. in September.  He said that 
Grandmaison told him that EXIM was not yet able to negotiate with 
the GRA on financing, pending a satisfactory arrangement on GRA 
Paris Club arrears.  Ambassador Efird asked if the Brazilian line of 
credit could not be used for this project since GE would do some of 
the actual overhaul work in Brazil using US components.  Brandao 
responded that the Brazilian line of credit has been used up for 
this year, and wouldn't be available for this deal.  (Note:  There 
had been discussion of sourcing some work and parts through the US 
company's affiliate in Brazil in order to avail itself of the 
Brazilian government line of credit.  Coincidentally, the Brazilian 
Embassy announced on November 13, 2006, that the line of credit had 
been increased from USD 580 million to USD 750 million for 
2006-2008. End note.)  Brandao commented that when a company is 
really interested in securing the deal, it finds creative ways to 
offer commercial financing packages.  In a meeting November 13, 
2006, Ambassador Efird informed the Brazilian Ambassador in Luanda 
that she was working on this commercial opening that would benefit 
workers in both countries to which he expressed his gratitude. 
 
¶8. (SBU) Ambassador Efird reminded Minister Brandao that US 
companies are great corporate citizens, also providing development 
and technical assistance to the GRA and people of Angola.  She 
emphasized the training and supervisory skills the US company would 
provide for the GRA as part of its proposal and the potential for 
future technical assistance on railway strategic planning and 
maintenance.  The Minister appeared very interested in the latter, 
noting that, with the Benguela rail links to Zambia and Congo, 
Angola is well-positioned to become a maintenance hub for Central 
Africa. 
 
¶9. (SBU) Embassy Luanda communicated the Minister's comments and 
perceptions on the GE proposal by telephone to the GE Rail 
Transportation office in South Africa, the principal negotiator for 
the deal.  In addition, we have provided written feedback to the 
DOC-ITA office which initiated the advocacy request and the GE 
government affairs office in the US. 
 
------------------------------ 
Connecting the Country by Road 
------------------------------ 
¶10. (U) Brandao also briefly discussed his trip to the US and 
discussions with US officials on the state of Angolan roads, noting 
that the Ministry of Transportation shares this responsibility with 
the Ministry of Public Works.  He said that the GRA is faced with 
the challenge of repairing and repaving old roads; preserving newly 
paved roads, and planning for and building new roads.  He believes 
Angola needs to build two major national highways - one traversing 
the country from north to south along the coastline and one from 
east to west.  He urged US companies to consider participating in 
building highways in Angola. 
 
¶11. (U) Brandao then (and more realistically) requested USG 
assistance for a technical study for highway development; design of 
a highway safety system and for technical training on dealing with 
hazardous waste spills.  Ambassador Efird replied she would alert 
USTDA to Angolan interest in technical assistance in the highway 
development study. She also mentioned that the US Dept of 
Transportation's Federal Highway Administration could possibly help 
with technical and training assistance and training on safety 
issues. 
 
¶12. (U) During the delivery ceremony for the Boeing Aircraft, 
Ambassador Efird was seated with the Angolan economic team (Minister 
of Finance de Morais and Deputy Prime Minister Aguinaldo Jaime) and 
raised the issue of US locomotives with the Ministers, emphasizing 
again the likely technical training assistance US companies often 
offer. 
 
--------------- 
Action Requests 
--------------- 
¶13. (U) Action Requests: 
A) FOR USTDA - please advise whether a technical study for Angolan 
highway development would be feasible and steps necessary to start 
process. 
 
B) For AF/S - Please follow up with USDOT-Highway Administration. 
 
LUANDA 00001210  003.2 OF 003 
 
 
We understand Minister Brandao met with DOT officials in September 
and discussed technical assistance.  Please advise on status of 
discussions and steps Embassy Luanda could take to facilitate 
technical expertise. 
 
C) For EB - We have heard that EXIM Bank asset based lending may be 
under discussion for locomotives as well as aircraft sales.  In 
Embassy Luanda's opinion, the window for a multi-million dollar 
sales opportunity with the possibility of a continuing partnership 
for providing locomotives to this major African rail link will close 
by March 2007. 
EFIRD