Companhia Dos Caminhos De Ferro Da Beira (CCFB)

Distressed

Failure

In May 2004, Government of Mozambique and the government owned port and rail company CFM awarded the restoration and management of the Beira rail system in Central Mozambique to the Indian consortium Rites and Ircon International (RII) under a 25 year concession agreement. The Indian consortium, comprising of two Government of India companies Rites Ltd. and Ircon International Limited, won the international tender amid stiff competition from the Chinese consortium comprising of Tenwin Trading Company and China Railways Construction Company. CFM and RII formed a new joint venture company, Beira Railway Company (Companhia Dos Caminhos De Ferro Da Beira or CCFB) to implement the project. CFM holds a 49% stake in CCFB and the balance is held by Rites (26%) and Ircon International (25%). CCFB took over the management of Beira rail system in December 2004. The Beira rail system consists of two lines, the Machipanda line - from the port in Beira to Zimbabwe and the Sena line – from Beira port to the Moatize coal mines in Tete province (with a spur into Malawi). The Sena line was completely sabotaged during the civil war and required significant reconstruction. The Machipada line though operational required rehabilitation. In addition to the complete restoration of the railway infrastructure, the project also required acquisition of new engines and other rolling equipment and the installation of telecommunications and security systems. The work took more than 3 years to complete. The total cost of the project was around US$ 152.5 million. The world bank granted a loan of US$110 million from the International Development Agency line of credit to the Mozambican government as part of a rehabilitation package. Of the US$110 million loan from the world bank, US$104.5 million was earmarked for the rebuilding of the Sena line and the remaining US$5.5 million was used for the institutional empowerment of CFM. The rehabilitation of the Machipanda line was funded in full by RII and was around US$ 55 million. In early 2011, the government of Mozambique indicated its plans to cancel the contract indicating that the concessionaire had to fulfill its obligations to improve services. Not sure about the subtype of PPI In the name, should it be the english name or portugese name. Under railroads, not sure of the segment.

Transport

World Bank Group

Project

Mass Transit, Seaport, Rail, Telecommunications, Government, Manufacturing (Industrial)