VZCZCXRO9482
RR RUEHBZ RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHTO #0896/01 2231032
ZNR UUUUU ZZH
R 111032Z AUG 09
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 0593
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLO/AMEMBASSY LONDON 0452
RHEFDIA/DIA WASHDC
RHEHNSC/NSC WASHDC
RUEAIIA/CIA WASHDC

UNCLAS SECTION 01 OF 02 MAPUTO 000896 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: EIND EINV EINT PGOV ETRD MZ SF
SUBJECT: ONE-STOP BORDER: PROJECT BETWEEN MOZAMBIQUE AND S. 
AFRICA DELAYED 
 
This cable is a collaboration between Embassy Maputo and 
Embassy Pretoria and is part of a series of reporting on 
regional transport infrastructure developments. 
 
¶1. (SBU) Summary:  Econoff met with officials at the 
Government of Mozambique (GRM) on May 28 and the South 
African Revenue Service on July 2 to discuss the status of a 
joint one-stop border project between Mozambique and South 
Africa.  Plans to create a 24-hour, one-stop border were 
signed in 2007, but construction has been delayed due to the 
global economic downturn and changes in the leadership in the 
South African Government (SAG).  Stakeholders from both 
governments met on July 10 to reiterate their commitment to 
the project, but their respective economic and political 
priorities differ greatly.  End Summary. 
 
------------------ 
Genesis of Project 
------------------ 
 
¶2. (SBU) Discussions to create a 24-hour, one-stop border at 
Ressano Garcia between Mozambique and South Africa to handle 
increasing trade and tourism flows started in 1997.  A Heads 
of State Agreement outlining a construction deadline of March 
2010 was signed in September 2007.  The original intent was 
for the project to be completed well in advance of the June 
2010 FIFA World Cup, which is expected to boost trade and 
tourism activities in the region.  The South African 
Government (SAG) originally earmarked R600 million ($74 
million) to fund the project.   The Government of Mozambique 
(GRM) could not offer much financial support, but has pledged 
land and facilities for the initiative. 
 
------------------------------------- 
Project Expected to Reduce Congestion 
------------------------------------- 
 
¶3. (SBU) Barbara Mommen, CEO of the public-private Maputo 
Corridor Logistics Initiative, told the South African press 
that the existing border post was not designed to handle the 
current load and the new project would "go a long way towards 
addressing both the infrastructure, processing, and 
congestion constraints."  In 2005, the two countries 
eliminated visa requirements and passenger flows have 
increased 80 percent since then.  The current infrastructure 
is inadequate to handle this dramatic increase.  Passenger 
flows also tend to rise dramatically during the Easter and 
Christmas holiday seasons and are expected to do so during 
the 2010 World Cup.  During the Christmas holidays, over 
500,000 passengers crossed the border. 
 
¶4. (SBU) The new one-stop border post will include three 
separate facilities to process tourists/passengers, rail 
cargo, and commercial cargo.  It will be built to ensure that 
there is enough space for the movement of both passengers and 
freight trucks, which will improve the current situation 
where freight trucks block the roads through the border, 
leading to long passenger and freight delays.  Cargo traffic 
will be processed at a site four kilometers inside the 
Mozambican border known as KM4. The relevant border 
authorities from South Africa and Mozambique will manage this 
site to ensure that documentation processing is efficient and 
user-friendly.  Documentation processing by the two 
countries' respective customs and immigration departments is 
currently inconsistent, repetitive and adds to congestion. 
 
------------------------------------ 
Economic Downturn Threatens Progress 
------------------------------------ 
 
¶5. (SBU) The new SAG leadership decided to reduce its 
financial contributions for the one-stop border project after 
the South African national elections in April 2009.  SAG 
leadership cited the economic recession and escalating costs 
for required domestic World Cup preparations (stadium 
construction and public transport upgrades) as the cause for 
this decision.  SAG officials are now calling for a phased 
approach for the one-stop border project.  SAG can currently 
contribute only R366 million ($45 million), which means that 
both countries will have to raise the rest of the funds from 
private investors and donors.  SARS officials also indicated 
that project costs would be much higher than the original 
estimates since construction did not begin as expected in May 
¶2008. 
 
--------------------------------- 
Disagreements over Project Design 
 
MAPUTO 00000896  002 OF 002 
 
 
--------------------------------- 
 
¶6. (SBU) Progress on the project was also stalled because SAG 
wanted to develop the passenger facility first in time for 
the World Cup and to place the commercial cargo facility on 
South African soil instead of the original plans for all 
three facilities to be located on shared land.  However, the 
GRM would like to simultaneously develop all of the 
facilities.   The SAG is focused on tourism growth and 
facilitation because of the World Cup, but the GRM is more 
economically dependent on cargo trade.  Incoming SAG 
leadership was also skeptical about the GRM's buy-in for the 
project given its lack of financial contribution. 
 
¶7. (SBU) The GRM is getting more involved with the project to 
address SAG concerns and is re-examining its budget and 
alternative funds to see whether it can raise the money 
required to have more influence on the construction phases. 
The GRM has approached donors such as the World Bank to see 
whether they could provide financing for some of the 
infrastructure.  GRM officials still hope that the first 
phase will be completed by March 2010.  However, a meeting of 
GRM and SAG stakeholders scheduled for June was delayed to 
July 10 by the South African side.  GRM officials expressed 
frustration that timelines for the other two phases have not 
been established yet. 
 
--------------------------------- 
Stakeholders Reiterate Commitment 
--------------------------------- 
 
¶8. (SBU) Stakeholders from the GRM, SAG, and private sector 
toured the sites for the one-stop border project on July 10 
and reiterated their support for implementation despite the 
economic downturn and escalating costs.  Cost estimates for 
the original plan design have reportedly reached R2 billion 
($250 million).  Stakeholders committed to retaining the 
objectives of the original design, but agreed to examine more 
cost-effective approaches.  Technical teams from both 
governments have been tasked to develop cost-saving 
strategies to be submitted to their respective governments 
within 30 days. 
 
------- 
COMMENT 
------- 
 
¶9. (SBU) Both sides remain committed to the development of 
the one-stop border project, but their respective economic 
and political priorities differ greatly.  The GRM would like 
to see greater progress on the development of the second and 
third phases since its economic growth and plans to increase 
capacity at the Port of Maputo depend heavily on the 
facilitation of cargo movements between the two countries. 
The incoming SAG also faces its own set of economic and 
political constraints.  The incoming Zuma administration 
campaigned on a platform to focus increasingly on domestic 
economic growth and service delivery, but faces the first 
major economic recession since the end of the apartheid era. 
In addition, costs for infrastructure investments for 2010 
World Cup-related projects have been rising.  The Zuma 
administration has begun reprioritizing SAG investments to 
focus on the mandatory domestic projects first. 
CHAPMAN