845C.331/7–352

The Consul General at Salisbury ( Sims ) to the Department of State

confidential
No. 6

Subject:

  • Meeting of DMPA and MSA Officials With Officials of the Southern Rhodesia Government on Transport and Coal Problems.

On June 28, 1952, the following persons attended a meeting in Salisbury at the office of the Prime Minister, Sir Godfrey Huggins, to discuss problems of transport and coal affecting the production and movement of strategic materials in the Rhodesias.

Southern Rhodesia Government Officials

  • Sir Godfrey M. Huggins, Prime Minister
  • Mr. E. C. F. Whitehead, Minister of Finance
  • Mr. C. A. Davenport, Minister of Mines and Transport
  • Mr. A. H. Strachan, Secretary of the Treasury
  • Mr. W. F. Nicholas, Personal Secretary to the Prime Minister.

United States Officials

  • General T. B. Wilson, Regional Director, Defense Materials Procurement Agency, London.
  • Mr. G. F. Raymus, Railway Consultant, DMPA
  • Mr. G. Clemens, Transport Specialist, MSA, Paris.
  • Mr. F. R. LaMacchia, American Consul

General Wilson opened the discussion by stating that a continuous and smooth flow of materials in short supply to the United Kingdom and the United States was vital to the joint defense effort. He said that the United States Government recognized the serious problems of transport facing the Rhodesias in their attempt to develop and speed the flow of exports and expressed the desire of the United States Government to cooperate fully with Southern Rhodesia toward finding basic solutions to these problems. For this reason Mr. Raymus had been assigned to investigate and report on the rail situation in the Rhodesias.

General Wilson noted that the main problems relating to the production of strategic materials in the Rhodesias involved transport and coal. Pointing out that there were both long and short term solutions to the problem, he cited the Pafuri railway link as a long term improvement. As a short-term means of alleviating the railway situation he urged the adoption by the railways of Diesel locomotives. He cited the fact that six Diesels had been offered for sale to the Southern Rhodesia Government by Union Carbide but they had been refused. He urged the Government to reconsider Union Carbide’s proposition suggesting a lease arrangement instead of outright purchase which he felt would be quite acceptable to Union Carbide. A possible objection that the American Diesels had only half the power of those which the Railways were negotiating to buy in the U.K. was resolved by Mr. Raymus who [Page 307] said the American Diesels could be used in pairs. General Wilson pointed out the fact that the Diesels were available immediately from Union Carbide while there was no indication when those from the U.K. could be obtained. The Diesels from the U.K. had not yet been ordered although apparently the Rhodesia Railways were committed to buy.

The Rhodesian officials agreed in principle with the suggestion to lease the Diesels from Union Carbide provided that personnel acquainted with their operation and maintenance were also provided and that there were no overriding technical objections advanced by the Railways’ administration. The six Diesels, they observed, could be used on the Salisbury–Umtali line which the government had already agreed to Dieselize in the near future. This section of line had been selected because of its proximity to the port of entry for petroleum and the Diesel oil storage capacity at Umtali.

Mr. Whitehead stated that the “whole of the problem is the railways—the coal can be obtained.” He said the railways were now unable to move all coal being produced at Wankie. In outlining the details of the difficulties faced by the railways, he emphasized the fact that railway trucks were being tied up in sidings and used for storage purposes because goods sheds were congested owing to the heavy movements in May of bulk cargoes from Beira and heavy traffic from the Union and locally. Other reasons for the shortage of coal cars include the following: 1) coal cars have been diverted to the heavy tobacco traffic because there were not enough covered wagons available, 2) heavy movements of copper in May (45,000 tons) reduced the number of coal cars available to Southern Rhodesia consumers and, 3) the African labor strike in Northern Rhodesia from the 12th to the 20th of May slowed down railway movements generally with its inevitable effect on the release of cars.

In addition to the shortage of coal cars, during the month of June there developed a serious shortage of locomotive power throughout the system owing to lack of coal at the main depots, excessive engine breakdowns and the near breakdown of the locomotive shed at Bulawayo Mr. Whitehead presented the following figures on locomotives ordered and in use:

Of 20 locomotives ordered from Germany, 19 have been delivered and are in use and one is to come. Of 10 French locomotives ordered, 5 were delivered and in use and 5 more were to come, 48 locomotives on order from the U. K. which were supposed to start arriving in October 1952 are not expected to arrive before January or February 1953. Thirteen South African locomotives which had been leased by the Rhodesia Railways have been returned to the Union. The net additional locomotives in use so far this year are, therefore, eleven and six more are to arrive later in the year. In general, the entire equipment [Page 308] of the railway is being employed to capacity; all locomotives are in use and there are no spares.

The Rhodesians claimed that they had lived up to the ECA allocation agreement but the railways were unable to deliver all coal allocated to the copperbelt. In June coal railings to the copper mines were 46,400 tons, a figure less than originally estimated but 1,630 tons higher than in May. On the other hand, saleable output had declined from the record May figure of 234,314 tons to 218,881 tons. Whereas 17,000 tons of coal had been dumped on the ground at Wankie during May, only a little over 1,000 tons were added to stocks in June for a total of 23,000 tons at the end of June. The Rhodesians said they had also tried to build up stocks of coal at the several power stations in accordance with their agreement with the International Bank but failed to do so. For a short while the stocks had been up to a seven day supply but swiftly fell back to a four days supply. In any case, stockpiling coal at the power stations has not affected the quantity of coal available to the copper mines.

In discussing the restrictions on the movement of copper and chrome the Rhodesian group acknowledged the fact that they had reduced railings of chrome and copper. Chrome was restricted to 20,000 tons a month to make way for the heavy tobacco traffic which is a far greater earner of revenue for the Railways than chrome. There was no possibility that chrome shipments would reach the target of 40,000 tons before March 1953. Copper movement was restricted to 30,000 tons monthly from the Northern Rhodesian copperbelt and 5,000 tons monthly from the Congo in order to provide more empty coal cars at Wankie for coal carriage to Southern Rhodesian consumers, who had apparently suffered abnormally the previous month during the period of heavy copper shipments.

Mr. Clemens and General Wilson reiterated the interest of the United States in cooperating with the Southern Rhodesia Government in solving their knotty railway problems and urged consideration of a technical assistance project under MSA auspices. They suggested that a group of Rhodesian railway personnel could profitably spend several months in the United States studying railway methods. The Rhodesians reacted favorably to the suggestion and noted that Mr. Allen of the Railways was already being considered for such an assignment under the State Department’s Educational Exchange Program.

In discussing Southern Rhodesia’s long range requirements for coal, General Wilson urged that the strip-mining method be considered as a possible alternative to the present system. Mr. Davenport replied that Powell-Duffryn, the Wankie management, had employed a company of experts on strip mining, the Paul Weir Company, and refused to use this method because they considered it no more efficient than the other. Mr. Davenport also pointed out the fact that Wankie Collieries were about to borrow additional funds locally and any hint that the [Page 309] Government was considering the adoption of a new method of mining would have an adverse effect on Wankie’s ability to obtain financing.

The discussion turned to the Pafuri rail link and Mr. Whitehead declared that the U.K. Government would not guarantee another IBRD loan for Southern Rhodesia because of a £50,000,000 limit on the Treasury’s guarantee authority and the U.K.’s desire to spread the guarantee around to other members of the Commonwealth. However, if Northern Rhodesia were willing to undertake the loan (about £8,000,000) to defray the external costs of the project while Southern Rhodesia would pay local costs, the U.K. Treasury would be willing to guarantee the loan.

It appears to the Consulate General as if the United Kingdom is really less interested in spreading the guarantees around the Commonwealth than in spreading the risk, in as much as the loan project would be exactly the same whether Northern or Southern Rhodesia assumed the loan. Northern Rhodesia’s financial position, by virtue of the sustained high prices for copper, the large and growing export surplus, and small public debt, is very strong and can easily sustain a loan of the magnitude required for the Pafuri link. Southern Rhodesia, on the other hand, has been financing a considerable development program through large and continuous borrowing since 1947. Public fiscal policy in Southern Rhodesia is now one of consolidation and retrenchment rather than continued acceleration of borrowing and investment. This is not to say that the Government could not sustain the burden of further loans or that it does not require more loans but that it is more “loaned up” than Northern Rhodesia and that at present it is a lesser [greater?] credit risk than the Northern territory.

When asked what was Northern Rhodesia’s reaction to the proposal to undertake the loan, Mr. Whitehead said that it would be referred to the Colonial Office for approval and it would be some time before he would know. (It has been learned since the meeting that a loan request has been submitted to the International Bank on behalf of Northern Rhodesia.)1 In the meanwhile Southern Rhodesia had gone ahead with Pafuri and has awarded a contract for the construction of culverts on the first section of line (about 50 miles). This will require an expenditure out of general railway funds of £750,000 up to March 1953.

In spite of the obvious concern of General Wilson and his associates over the restrictions on copper and chrome movements, the Rhodesian officials apparently have no intention of removing these restrictions until the railway situation is eased by the arrival of new locomotives and coal cars now on order. Fortunately a quantity of rolling stock is expected to arrive in Beira this month and should help the situation [Page 310] somewhat by late August or September. Another hopeful factor is the improved phasing plan designed to prevent the bunching of bulk cargoes entering Beira. Except for timber there is now practically no bulk traffic destined for Northern Rhodesia at Beira.

It is difficult to foresee any real improvement in the rail situation until the large numbers of rolling stock and locomotives on order are delivered and in use and until other parts of the railway rehabilitation program are completed such as the expansion of storage capacity at the goods sheds, enlarged warehouses at private sidings, and replacement of the obsolescent locomotive shed at Bulawayo. The investigation by Mr. Raymus should uncover a number of technical and perhaps managerial deficiencies which, if properly dealt with, would also improve the operation of the Railways.

Harold Sims
  1. The IBRD loaned Northern Rhodesia $14,000,000 on Mar. 11, 1953, for railway development. For further information, see the International Bank for Reconstruction and Development, Tenth Annual Report: Appendices (Washington, 1954–1955), pp. 18–19.