STRATEGIC infrastructure plans add cohesion and competitiveness

For José Maria Veiga, the former minister of Infrastructure and Maritime Economy, timely expansion and modernization are crucial for sustainability and social cohesion, not least because of the nation's disjointed, archipelago structure, and the number of Cape Verdeans living abroad, estimated by the International Migration Organization to be 700,000 - more than half of the population currently residing on the islands.

A lack of any significant natural resources means the government priority is to build an economy that relies on more than tourism.

"As more ports are constructed, vessels will be better able to move between the islands, allowing goods and people to move freely about the country. Airports play a similar role," he says. "We should keep in mind that we are a country that wants to transform the islands into an international center for services, and we will use our air and maritime transport potential to its full advantage."

Cape Verde boasts 10 airports, four of which are international, at the capital Praia, Sal, Boa Vista and S?o Vincente, that has helped boost tourism, and while the focus is on a diversified economy, the tourism figures have been climbing.

"Despite the crisis, we've experienced large increases in tourist arrivals," Veiga says. "Boa Vista, in particular, has taken a step forward. It will be necessary to attract more infrastructural development, and our hotel supply is limited.

"We give urgent attention to water and sanitation. We have received funding from the Millennium Challenge Corporation (MCC) for the first phase of such developments. I am pleased to say we were the first country to be eligible for a second round of funding from the MCC, due to the excellent management and results.

"We have also had a strong evolution of partnership for development from China. Whether through loans, grants, or direct investment, China has supported the modernization of institutions and infrastructures in Cape Verde."

For Mario Paix?o Lopes, chairman of Airports and Air Navigation Company S.A. (ASA), air transport, being both fast and safe, will play a decisive role in modernization and communication strategies.

The country's air entry-points have contributed enormously to expand the tourism product. Visitors can sample diving, hill-walking, fishing, windsurfing or sunbathing.

"This is a very important issue for the government and ASA, as a 100-percent public company, plays a key part in modernizing the air network," he says. "Airports have also facilitated access to Cape Verde through different gates of the country. This is important for economic growth and has helped to stimulate investment in those islands where there is an international airport, bringing competitiveness to that destination."

Boa Vista is an excellent case in point. Since the international airport opened there in 2007, investments in hotels, resorts and real estate have flowed in. Air traffic is growing at a rate of 30 percent a year, and it is due to become one of the hottest destinations in the year, with an average of 30 charters a week from around the world.

"Air transport has contributed to the inducement of new dynamics in all sectors of the economy," Lopes says.

The organization has also played a strategic part in Cape Verde's global economic dynamic, through bilateral agreements.

"Early last year, ASA signed an agreement to adapt Cape Verde's regulations to the EU legal framework, which would evolve to vertical agreements for open skies in Europe," the aviation chief says. "It's a prime target for ASA and negotiations are already under way.

"We also have an open skies agreement with the US under which airlines from both countries can fly with unlimited frequency, and there is one with other countries within the West African region. Cape Verde is building these factors to boost accessibility and competitiveness that will allow policies to be successful.

"To build the hub and achieve our objective of transforming Cape Verde into a platform for air services, it is necessary to create a good logistical base, as well as providing quality services that can develop the cargo and passenger segments to its fullest potential."

The air chief points out some of the advantages that set Cape Verde apart from other countries in the region.

"We enjoy a consolidated democracy with peaceful transfer of power, cultural homogeneity, economic stability and a risk of political, ethnic and religious conflicts that are close to zero. Cape Verde is safe. All investors can come here without problems, and that is an important factor in our competitiveness," he says.

"Clearly the world is in crisis and this is affecting air travel. We are in a world of uncertainty and are seeing investments retracted especially those from Europe, yet we have the strongest trade and tourism exchanges there. Within this scenario, we are doing our bit and preparing well for the good times."

Airport traffic is growing solidly. "Foreigners have a good image of Cape Verde, the country has prestige and credibility abroad," Lopes says. "ASA is a barometer of Cape Verde. We finished 2011 with positive rates of productivity, and this speaks well of the potential and how the country is facing the crisis period."

Staff training a priority

Like the government, ASA's chairman is also making human resources a priority with regards to staff training. However, his vision extends to a change in the mentality of the island population. "We need to promote a mentality that is focused on services for the client. This is critical and depends on the people, not just the infrastructure. ASA has a strategic plan for training and innovation. We understand this is a key factor for success."

While acknowledging consistent help from Chinese investors - "There are signs on all the islands of the great Chinese contribution to the development of Cape Verde" - Lopes lists the new developments in the pipeline: "We are expanding and modernizing Boa Vista Airport, especially the passenger and cargo terminals, in order to meet growing demand. We are doing the same to Sal airport."

"All these projects are in the planning stage and awaiting funding," he says. "We need around US$20 million. In S?o Nicolau, we are finalizing the executive protocol for the construction of a new passenger terminal to improve services."

"These are the priority projects. In Praia, there is an feasibility study under way for the expansion of the airport. Once that is completed, we will know where and how to intervene. Opportunities exist for investment in all these areas. The tenders will be announced very soon. We want to continue working to promote quality and excellence, not just among our employees, but among all Cape Verdeans."

The government is also optimistic that the country will soon open up to become a popular cruise ship destination in the North Atlantic.

Franklim Spencer, chairman of ENAPOR, the state-owned company in charge of creating a healthy, competitive and diversified port enterprise, takes up the story.

"The ports sector ended 2011 with an overall growth of 10 percent," he says. "We have grown in all segments and in almost every port. There was a growth in international traffic and cabotage, and growth between the islands of Cape Verde also increased.

"We also had considerable growth in the passenger segment due to increased regular maritime transport offer. This is a very important element, as in the past, it constituted an obstacle to tourism growth and we have been tackling these obstacles by eliminating waiting lists. This year we will inaugurate the new infrastructure in Porto Novo, the port with the best possibilities to mobilize tourists which will also be a reference for cruise tourism.

ENAPOR is already in negotiations with the Association of West African ports and various shipping companies for possible cruising partnerships and has begun a dialogue with the Brazilian Port of Fortaleza in response to the demand of the 2014 World Cup and 2016 Olympic Games. "We have an agreement with the Port of Fortaleza to develop new tourism products within the mid-Atlantic cruise segment," Spencer says. "For example, cruises departing from Brazil can pass by Cape Verde before arriving to the Canary Islands, with a potential connection to Madeira.

"Operators have already shown interest in a West African package, which comprises Senegal, Guinea Bissau, Cape Verde and Gambia that started last November. Fred Olsen will begin making stops in Cape Verde, within five national ports after the completion of works.

"Cruise tourism is not a port business per sé but one that arose because the ports started getting visitors. In the past, the ships that docked here carried 200 passengers, now they are carrying 600 passengers. Now we understand the potential of this segment, we can organize, develop and promote activities."

Fisheries expansion

Cape Verde's fisheries sector has grown enormously internationally in recent years, and is set to play a dynamic part within the economy, with a strong impact on job creation for Cape Verdean sailors and crew. China has a strong positioning strategy in the region and will require certain services from Cape Verde.

All projects will be open for Chinese investment, on a PPP basis, Spencer explains. He is particularly excited about opportunities in fish transshipment. ENAPOR has an agreement to construct refrigerators with a capacity of up to 50,000-60,000 tons and there are plans to implement fish processing plants for export.

"Installing the Beijing-based CNFC Overseas Fishery Co Ltd here will create a flow of imported materials, components and support for fisheries and the construction of large warehouses. These might generate a flow of between 10,000 and 15,000 containers that will bring all these materials to be incorporated between the fleet," he says. "Ship repair company, CABNAVE, has set up a modern slipway platform which can take vessels up to 110 meters long and 18 meters wide on S?o Vincente, and this has spawned a chain of businesses.

"We have a great business environment, a competitive workforce and the most flexible legislation in the region. We are aiming to build a terminal with hundreds of acres available for the installation of logistics and an industrial area very close to the port. I hope it will become the largest offshore platform in the region."