 Okay, good afternoon everyone. The paper that I am presenting is on infrastructure development of local and regional capabilities in South Africa and in Mozambique. So the paper draws from a long study that was done by the Centre for Competition, Regulation and Economic Development. So it draws heavily on that paper, so I will present part of the findings from that research. So basically I am going to give you a background of the study, then the research questions that we tried to answer, then the structure of the Mozambican construction sector and also an analysis of the procurement rules. Procurement is very, very important in terms of identifying key participants in construction related projects. So it's actually an important factor that we analyzed. Then I will talk about the key findings from a local perspective that is Mozambican construction firms response to rail infrastructure investment. But I would say from the study we shall see the findings that there hasn't been much local participation of Mozambican firms. Then we are also going to look at the winners for the Nakala and Sena rail project. So this is the case study that we looked at. We focused on the Nakala and Sena rail line because it's linked to mining, coal mining that is happening in Mozambique. For some of you we have heard about it. There is massive coal mining in Mozambique which is being exported to many countries including China. Then we also looked at the regional response to Mozambican infrastructure demands. That is we focused mainly on South Africa. Also South Africa responded to the infrastructure demand in Mozambique. Then we have got some recommendations. So for the study we interviewed 27 companies that include construction civil engineering firms. And consulting engineering firms. And also raw material providers like sleeper, manufacturers and signal equipment suppliers. So they were also included in the 27 which we interviewed in Mozambique and in South Africa. We also interviewed about six institutions, mainly government departments and clients which include major mining houses. Fali was the main investor in Mozambique so we interviewed it. Then that's the one client that we interviewed. Then why did we choose Moates? So Moates actually is co-deposit. Co-deposit in Moates are the largest known but not yet exploited reserves in the world. So the exploitation of these reserves has been dependent on investment in Sena Railway line which links Bayra. And also the Nakara line from Malawi to the Port of Nakara. So these big investments like Sena line and Nakara line they all contributed about over 2 billion in terms of the amount of investment that was made by the World Bank and Vale which is the key mining firm in Mozambique. So total FDI in Nakara project was actually equivalent to 35% of Mozambique GDP which actually shows that these are big investments where local and regional capabilities can actually be built along these investments. So the study now aims to understand whether these investments are organized as part of an enclave development or as a part of developing a diversified local and regional capabilities. And this view also comes out in the AU, the mining vision policy where they are thinking around developing corridors and regional capabilities around infrastructure projects. So the research questions that we try to answer was what drives winning a contract, what really drives winning a contract in Mozambique and to what extent are local meaning Mozambique and regional meaning South Africa linkage is being built given the competitive and procurement dynamics that exist in Mozambique. Then what are the challenges to local and regional linkages given competitive and procurement dynamics? So these are the main questions that we answered in our paper. So giving you a bit of a background, the structure of the Mozambican construction sector. So this table here shows the structure of the Mozambican construction sector but what we see from this table is that Mozambique categorize its construction firms into seven grades and these actually depends on the kind of projects that they are able to carry. So what we see here is that the majority of firms in Mozambique, local Mozambican firms are actually in grade three. So we here in this grade three we find firms that are capable of building like houses. They don't fit into the big projects which we are talking about here. And grade seven is where we find the big firms that are capable of building like railway lines. The one where we looked at the Sena line and Nakala line. So that's where we find the biggest firms. But what is important to observe from number seven here, where we find big firms, majority of these firms are foreign firms. So these are firms from South Africa like Marine Robots, those big firms. And we only have a couple of Mozambican firms. And those firms that we find are actually not as big as they are in terms of financial debt. So they are classified as grade seven but they actually don't have the capabilities to undertake some of these big projects. So now if you look at the table here shows the winners for the Nakala Sena line. So the first part is for the Nakala line. Then this part is for the Sena line. What we actually see here is that we have a couple of South African firms there which are in red civil construction firms. And we also have consulting engineering firms here, SRK and Wollett persons. And we have Green Road which was actually subcontracted to do work in Sena line. But what is also important to note from this table is that if you look at the consulting engineering firms these are the guys who do the feasibility studies. Like if they want to construct a rail track from point A to point B they undertake some feasibility studies to see if it's possible to lay a track. So what we have discovered is that majority of South African consulting engineering firms were acquired by multinational big consulting engineering firms and they are using that strategy to enter into the African continent. That's why we see consulting engineering firms like SRK going to do work in countries like Mozambique. But what is also important to note is that we don't see any Mozambican firm in this list. So that actually explains the lack of capabilities on the part of Mozambican firms. So we analyzed the procurement rules like as I have said in my introduction that procurement becomes very important when selecting clients in the construction sector. So we analyzed government procurement rules, government partnered with VAL which is actually one of the biggest mine companies in Mozambique. So they partnered with CFM which is part of government, it's railway regulator. Then World Bank and European Investment Bank they also funded the Sena line, the rehabilitation of Sena line. So we analyzed those procurement dynamics and what we found is that for government procurement police we realized that price and quality are given more weight in the evaluation process and it also takes into account local participation but there is lack of enforcement of preference margin given to as a result of limited external funding. Then the World Bank what we see from their procurement policies is that they have inherent selection and participation bias and this participation bias comes from global and private tender system that are advertised internationally. So they have to advertise the tender internationally and that brings in big multinational companies with a huge record with massive experience which Mozambican firms don't have. Then for VALE and CFM, VALE actually categorizes this programming into local, national and global and for the local that is for purchases from firms that are 51% owned by local citizens. Those are Mozambican firms and what we saw is that these are the services that they acquire from local Mozambican firms are cleaning services and maintenance services. Then their national procurement is actually for purchase of goods and services made from locally registered firms. So these are firms that are registered in Mozambique and they are not necessarily Mozambican owned companies. They are just registered, any firm that is registered in Mozambique qualifies under the national. Then the global purchase, the global procurement is done internationally. They advertise the tender's international newspapers but what we also found is that increasingly they use a number of firms that are on their vendor list they have a list of vending lists and these are firms that the VALES actually work with mainly from Brazil. Then the response now of Mozambican construction firms to rail infrastructure. So what we found is that there is no localization of Mozambican rail infrastructure construction value chain because of the multinational participation bias in selection biases which actually is not a function of price competitiveness but it's more to do with long track record financial depth in size of the project. So although we have Mozambican firms that are in grade 7 they don't have the financial depth to undertake these projects. And also Mozambican firms were facing operating challenges such as crowning shortages and high price of key inputs like cement and machinery and equipment. So it was one of the biggest challenges and this is further worsened by the fact that in Mozambique there is a queuing system because of the availability of majority of raw materials so they require big clients to be saved first who are working on big projects. Then in terms of regional response to Mozambican infrastructure demands, what we see is that there is some regionalization which is taking place. From the table that I showed you we saw a couple of South African firms being involved there and what these firms have been using are consulting engineering firms as the main gateway of entering into second tier South African for South African civil engineering firms. So they are using this strategy whereby when consulting engineering firms are approached by a client they come up with feasibility studies and the client also requires that they come up with an estimate of the costs. So when they produce the estimate of the costs they have to interact with civil engineering firms. They ask about how much does it cost to construct a rail line from point A to point B. When they get that information they are also giving them information about potential projects. So this is how they have managed to get into Mozambique and they also have influence in terms of deciding on the companies to undertake the project since they know the companies that they have worked with. Then we also found out that there is actually a South African diversified group which opened 120 million concrete production plant in February 2014. So that plant is actually employing about 75 locals and there is one expert from South Africa. But what we see is that there is competition in the Mozambican construction sector. Competition comes from Chinese firms that use finance so these firms don't even go for tendering. They go to Mozambique with finance. They approach government with what they call unsolicited bids. They go there with finance, they offer government that we are going to construct a rail line and provide everything. Then the government will say yes you can do the work so they don't have to go through all these procurement policies. We also have a group of Portuguese firms that use language and cultural ties which is also a barrier in Mozambique where they speak Portuguese so they are cultural ties there. Then I will just skip and move on to the recommendations because my time is up. So as part of our recommendations there is need of a sector specific industrial police in Mozambique. What we observed is also that there is no strategy for construction in Mozambique and this is a result of lack of capacity in government even to come up with a police to support the development of construction sector in Mozambique. There is also a scope for joint partnership that could be mutual beneficial in building Mozambican capabilities including partnerships with South African domicile firms. That is those South African firms that want parts of constructing the rail line can actually partner with Mozambican firms. Then there is also need for regional development financing to develop a regional local partnership in the construction sector. South African firms can actually use this development finance and use the Chinese model of approaching government with finance. Then the high prices of key inputs also reflects possibilities for developing capabilities. And also the issues that were raised around delays at borders since Mozambique doesn't have sufficient raw materials there are also delays around borders so there is need to reduce delays at border posts. Thank you very much.