MAPUTO, A consortium formed by the Portuguese construction group Mota-Engil and the China National Complete Engineering Corporation has signed a contract with Thai Mocambique Logistica to build a 500-kilometre railway from the Moatize coal basin in the western province of Tete to a new mineral port to be built at Macuse, in Zambezia province in northern Mozambique.

Thai Mocambique Logistica is the company which won the concession for the Macuse port and railway project in 2013. It was formed by the Thailand’s Italthai Industrial Company Limited, with 60 per cent of the shares, Mozambique’s publicly owned port and rail company, CFM, with 20 per cent and the private Mozambican business group Corredor de Desenvolvimento da Zambezia (Codiza), also with 20 per cent.

According to a statement from the Mota Engil-CNCEC consortium, the contract gives a deadline of 44 months to build the railway at a cost of 2.389 billion US dollars.

Since construction of the railway is likely to involve a large amount of goods and services from China, Chinese credit institutions such as the Chinese Export-Import Bank, could make a positive contribution to the financial engineering required.

The Chief Executive Officer of Thai Mocambique Logistica, Jose Pires da Fonseca, had announced in March that the winning bid had come from the Portuguese-Chinese consortium.

The main cargo which will be transported on the Moatize-Macuse railway is expected to be coal. The Macuse port and railway will compete against two existing routes for coal exports — the Sena line from Moatize to Beira, and the line across southern Malawi to the northern port of Nacala-a-Velha.

At only 500 km, the Macuse line will be shorter than either the Sena or the Nacala lines. Macuse port will be able to receive ships of up to 80,000 tonnes � much larger than the ships that can dock at Beira, although Nacala-a-Velha has the advantage that it can take ships of any size.