VZCZCXRO2866
RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMR RUEHRN
DE RUEHKI #0866/01 2840608
ZNR UUUUU ZZH
R 100608Z OCT 08
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 8583
INFO RUCNSAD/SADC COLLECTIVE
RUEHXR/RWANDA COLLECTIVE
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEAIIA/CIA WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/HQ USEUCOM VAIHINGEN GE

UNCLAS SECTION 01 OF 03 KINSHASA 000866 
 
SIPDIS 
 
PASS TO USITC TO L. SCHLITT 
 
E.O. 12958: N/A 
TAGS: ECON ETRD OTRA ASEC CG
SUBJECT: DRC RESPONSE TO USITC STUDY ON SUB-SAHARAN AFRICA 
 
REF: STATE 85109 
KINSHASA 752 
07 KINSHASA 592 
KINSHASA 406 
07 KINSHASA 1133 
KINSHASA 402 
 
¶1. (U) Background and Overview.  Inadequate physical infrastructure 
in the Democratic Republic of Congo (DRC), a country comprising a 
land area of 2,345,000 square kilometers, represents a key 
constraint for the country's economic development and export 
competitiveness.  The Government of the DRC (GDRC) has made 
infrastructure development and rehabilitation a priority as the 
country begins to recover following more than ten years of civil war 
and literally decades of mismanagement, negligence, and a lack of 
clear public policies in the infrastructure sector.  International 
donors and a recently concluded multi-billion dollar Sino-Congolese 
agreement will provide critically needed resources for 
infrastructure development.  However, given the country's enormous 
needs, rehabilitation and development of key infrastructure, 
including roads, energy, rail and river transport, will remain a 
constraint in the short-term for the competitiveness and production 
of key products both for domestic consumption and export. 
 
¶2. (U) While the majority of the DRC's population remains engaged in 
subsistence agriculture, the country is endowed with enormous 
natural resources, including a variety of minerals (copper, cobalt, 
diamonds, gold, coltan, zinc, and other base metals), petroleum 
(currently exporting 23,000 barrels per day), and timber.  The DRC 
also has the world's most promising hydroelectric production 
potential.  The planned rehabilitation of the existing hydroelectric 
production turbines at Inga I and Inga II, along with the larger 
Grand Inga Dam project, would enable the DRC to become a major 
producer supplying needs across Africa (ref D).  End Background and 
Overview. 
 
Current Physical Conditions 
---------------------------- 
 
¶3. (U) A) Internal Transportation Networks: Road, Rail, Waterway 
 
The national road network totals 152,400 kilometers, including 
145,000 kilometers of national, regional and provincial roads, and 
7,400 kilometers of urban roads.  98 percent of DRC roads are 
unpaved, whereas only 2,801 kilometers are tarred.  The road network 
includes 1,965 bridges totaling 25,130 meters, and 187 ferries 
(trail-ferry, motor or canoe).  The DRC established with donor 
assistance a priority network of 29,281 kilometers in 1990 called 
the "National Ring."  The network includes roads that link the 
capitals of the DRC's 11 Provinces (10,652 kilometers) and other 
roads deemed necessary to support country integration. 
 
¶4. (U) The national rail system is operated by the government-owned 
Societe Nationale de Chemins de Fer Congolais (SNCC) in the east of 
the country and the government-owned Office National des Transports 
(ONATRA) in the west and north.  There are currently 4 different 
networks of rail lines, totaling 4,700 kilometers.  The first 
network provides a connection between the port of Matadi and 
Kinshasa.  The second connects points in Southern Africa and the 
Lake Tanganyika areas with Lubumbashi.  A third network links 
Kisangani to Ubundu, as a means to bypass Stanley Falls on the Congo 
River.  The final network is located in the Uele area (northeast). 
The four networks are not linked and use different gauges, most of 
which are narrower than the standard rail gauge used by Zambia and 
countries to the south. 
 
¶5. (U) The South Katanga electric rail totals 1,000 kilometers and 
has gauges ranging from 0.6 meters to 1.067 meters.  This southern 
network links the Katanga province and many of the major 
copper/cobalt mining companies to southern Africa through Zambia. 
The stretch of rail from Kisangani to Ubundu has a gauge of 1 meter, 
while the rest of this network measures up to 1.067 meters.  The 
Kinshasa - Matadi Railway is 366 kilometers long, with a 1.067 meter 
gauge.  Importers and exporters rely more heavily on trucks to carry 
containers between Kinshasa and Matadi due to the poor conditions 
and unreliability of this rail network. 
 
¶6. (U) Waterways have traditionally been the principal means of 
transport for both goods and people within the DRC.  The total 
length of waterways is estimated to be 15,000 kilometers, including 
the Congo River, its tributaries, and unconnected lakes.  The 
1,000-kilometer Kinshasa-Kisangani route on the Congo River, 
operated by river tugs pushing barges lashed together, is the 
longest and most utilized waterway.  Tugs also bring timber 
downriver, 8 to 10 logs at a time floating and lashed together. 
 
KINSHASA 00000866  002 OF 003 
 
 
Kinshasa, with 7 kilometers of river frontage occupied by wharfs and 
jetties, is the largest inland waterways port on the continent. 
 
 
¶7. (U) B) External Transportation Networks 
 
Kinshasa is linked to Brazzaville by regular boat and ferry services 
that travel the 3.5 kilometers across the Congo River.  Kinshasa is 
also connected to Bangui in the Central African Republic via the 
Ubangui River.  Goma and Bukavu in Eastern DRC are connected with 
Rwanda through Lake Kivu and a land crossing at Goma-Gisenyi. 
Kasenga and Pweto in the DRC are connected to Nchelenge, Kashikishi 
and Kashiba in Zambia through the Lake Mweru system.  Two small 
ports on the DRC side, Kisenye near Bunia and Mahadi Port in the 
north, link to the Ugandan ports of Butiabo and Pakwach. 
 
¶8. (U) C) Other Infrastructure: Energy 
 
The DRC's extensive potential hydroelectric capacity is estimated to 
be 100,000 MW.  The total capacity of the turbines currently 
installed is approximately 2,500 MW, but actual production is 
600-700 MW because two-thirds of the turbines are not functioning. 
Only a small percentage of the DRC's population, concentrated in 
urbanized areas, has access to state-produced energy.  In Kinshasa, 
provision of electricity is sporadic, and the state energy 
production agency (SNEL) is badly in need of restructuring.  The DRC 
mining sector alone requires 2,100 MW, representing 84 percent of 
current generating capacity, to meet its energy needs.  As a result, 
many economic operators rely on generators of 300 to 1,250 KVA, 
increasing operational costs by 10 to 15 percent.  Projected repairs 
should allow Inga turbines to work at full capacity (1,774 MW) by 
¶2010.  DRC exports hydroelectricity to its neighbor, Republic of 
Congo, along a 220-kilovolt (KV) connection.  The interconnection 
supplies nearly one third of the electricity consumed in 
Congo-Brazzaville.  Power from Inga is also transmitted to the 
Zambian grid along a 500-KV DC line from Inga to Kolwezi in Southern 
DRC, and a 220-KV line from Kolwezi to Kitwe in northern Zambia. 
South Africa also imports DRC's energy output through the Southern 
Africa Power Pool grid. 
 
Associated Infrastructure Service Providers 
------------------------------------------- 
 
¶9. (U) DRC freight forwarders are privately-owned companies that 
have been set up by importers.  The market has been opened to 
competition, falling into two categories: domestic and international 
freight forwarders.  The international customs brokers and freight 
forwarders are traditionally larger companies, but the opportunities 
to circumvent the lawful process for customs have allowed entry into 
the market by several smaller organizations (ref E). 
 
¶10. (U) The government operates all ports, railways, and waterways, 
resulting in a high level of mismanagement and limited maintenance. 
The DRC railway parastatal company, SNCC, manages the eastern 
infrastructure backbone of the DRC economy, while the national port 
company, Office National de Transport (ONATRA), manages that of 
western DRC including Matadi, Boma, Banana, Kinshasa, Mbandaka, and 
Kisangani ports.  Roads are under the authority of the national 
Office des Routes (OdR) and the DRC Roads and Drainage Agency 
(Office des Voiries et Drainage) through the Ministry of 
Infrastructure, Public Works and Reconstruction.  Production and 
distribution of energy is through the State Energy Production Agency 
(SNEL). 
 
¶11. (U) DRC customs procedures remain highly bureaucratic.  For 
example, more than fifteen government procedures are required to 
clear customs at Matadi Port.  However, the GDRC has streamlined the 
process at some international airports (Kinshasa), ports (Kinshasa), 
and land borders (Kasumbalesa in Katanga).  ONATRA has been trying 
to establish a new "one-stop-shop" for customs clearance, but 
importers report that corruption prevents the new system from taking 
hold. 
 
Efforts to Improve Infrastructure 
---------------------------------- 
 
¶12. (U) In October 2006, then-candidate Joseph Kabila announced that 
as president his economic development plan would focus on progress 
in "cinq chantiers" (literally "five work areas") or prioritized 
sectors: education, health, infrastructure, water and electricity, 
and job creation.  Since then, the GDRC has begun to establish more 
specific and coherent policies.  The GDRC's road transport policy 
focuses on three areas: construction of new asphalted roads; the 
resettlement of traffic on non asphalted roads; and the protection 
and the maintenance of existing road networks under the National 
 
KINSHASA 00000866  003 OF 003 
 
 
Fund for Road Maintenance (FONER).  International donors engaged in 
road rehabilitation include the World Bank, the European Union, the 
African Development Bank, Kuwait, Ex-Im Bank, and Belgium. 
 
¶13. (U) Waterways and related infrastructure are to be rehabilitated 
as part of the restructuring of various state-owned companies 
including ONATRA and SNCC, an effort managed by the GDRC Ministry of 
Portfolio and supported by the World Bank.  The rehabilitation of 
the rail network and port infrastructure aims to promote trade 
between the DRC and regional trade partners. 
 
¶14. (U) In the energy sector, the GDRC has launched bidding 
procedures in order to raise funds for Inga I and Inga II 
hydroelectric turbine rehabilitation.  SNEL has also entered into 
several joint ventures with private sector companies that fund 
hydroelectric power generation projects in exchange for a guaranteed 
supply of electricity to their facilities. 
 
¶15. (U) A multi-billion dollar agreement concluded in early 2008 
with a consortium of Chinese companies will create a joint venture 
to exploit mining resources and develop Congolese infrastructure. 
The project will be financed by a USD 9 billion loan arranged by the 
consortium.  Though not all details have been made public, the GDRC 
announced that it will exchange over 8 million tons of copper and 
over 200,000 tons of cobalt for an estimated USD 6 billion in 
Chinese-funded infrastructure projects, including roads, railway, 
universities, hospitals, housing and clinics.  The remaining USD 3 
billion will fund necessary construction projects to support the 
mining joint venture. 
 
Impact on Export Competitiveness 
--------------------------------- 
 
¶16. (U) The poor quality of the DRC's infrastructure has a direct 
impact on both the quality and supply of locally produced products. 
The majority of DRC exporters regularly experience increased 
operational costs as a result of inadequate infrastructure. 
 
¶17. (SBU) A) Natural Rubber 
 
According to Mr. Robert Ducarme, a Belgian who has spent thirty 
years exporting natural rubber from the North Kivu Province 
(specifically from Beni, 75 kilometers from Uganda), costs of 
production have doubled during the last decade.  The lack of 
transport infrastructure has required his operations to both invest 
in road infrastructure and purchase generators.  These additional 
production costs have lowered his competitiveness compared with 
other regional producers such as Cameroon.  He also said producers 
of natural rubber in eastern DRC must export through the port of 
Mombasa, Kenya, and therefore have higher operational costs than 
western operations close to the port of Matadi. 
 
¶18. (U) B) Mining 
 
The mining companies in the Katanga province, primarily copper and 
cobalt operations, have access to the DRC's most extensive road and 
rail links for export through Zambia.  The companies are still 
required to build their own road network, linking it to the main 
roads, and invest heavily in a reliable supply of energy.  The 
mining companies in the Kivus (gold, cassiterite, coltan, etc.) face 
the challenges of both very poor infrastructure and the on-going 
violence between several armed groups.  Operators in the Kasai 
provinces, where most of the diamond mining is located, rely on air 
traffic to bring in supplies and export the diamonds.  Companies in 
all provinces of the DRC must bring in the majority of their own 
equipment and supplies for the construction and management of mining 
operations.  Though high prices of commodities over the last few 
years have supported investments in the DRC, the additional costs 
and delays in shipping, transport, and customs clearance have a 
significant negative impact on the ability to remain competitive. 
 
¶19. (U) C) Agriculture 
 
The Congolese economy is largely rural, informal, and agricultural. 
Agriculture accounted for approximately 42% of GDP in 2007, though 
its share has been gradually declining. Despite extensive fertile 
land and the potential for the DRC to serve as a breadbasket for 
Central Africa, agricultural production remains largely based on 
subsistence farming, with little formal commercialized activities. 
Collapsed infrastructure, particularly key road links between 
producers and clients, lack of investment, limited access to credit, 
inefficient land use, and a difficult policy environment have 
reduced the production and marketing of key agricultural products. 
 
BROCK