Mozambique raises coal railway, port project costs to $5 billion

By: | at 02:19 AM | Intermodal   | Ports & Terminals  

MAPUTO, Dec 18 (Reuters) - Mozambique has increased theestimated cost of a railway and port project to boost coalexports to $5 billion, almost twice as much as its initialprojection, a Ministry of Transport official said.

Mozambique picked Bangkok-based Italian-Thai Development Pcl to construct the 525 km (325 mile) rail line from Teteprovince to Macuse in Mozambique’s Zambezia province and a portable to handle 25 million tonnes of cargo per year.

The project was initially pegged at $3 billion but thefigure has been revised.

“The total value of both contracts is estimated at $5billion, with the construction planned for 2016,” Ministry ofTransport spokesman Verlopes Nhampossa said.

He did not give a reason for the revision but said technicalteams were working on how much money would be spent on therailway line and the port separately.

Mozambique, a former Portuguese colony that emerged fromcivil war two decades ago, boasts some of the world’s largestuntapped coal reserves and is expected to become a key source ofpremium, hard coking coal used in steel making.

However, infrastructure bottlenecks have become a majorheadache for mining companies in the coal-rich Tete province,with some projects delayed or put on hold due to the problems ofgetting coal to port. (Reporting by Manuel Mucari; Writing by Olivia Kumwenda-Mtambo;Editing by Ed Cropley)