Lisbon — The final agreement to hand over majority ownership of the Cahora Bassa hydroelectric dam, in the western Mozambican province of Tete, to the Mozambican state, may be signed in Maputo by 31 October.

A Portuguese government source told AIM in Lisbon that for this purpose Portuguese Prime Minister Jose Socrates is to visit Maputo before the end of the month.

The Mozambican and Portuguese governments signed a memorandum of understanding on 2 November 2005, during President Armando Guebuza's first official visit to Lisbon, which envisaged the transfer of control of the dam operating company, HCB, from the Portuguese to the Mozambican state.

Currently Portugal owns 82 per cent of HCB, while the remaining 18 per cent is in Mozambican hands. The November 2005 agreement sought to reverse this situation: in return for a payment of 950 million US dollars to Portugal, Mozambique would end up with 85 per cent of HCB.

Optimists in Maputo assumed that the final deal would be signed in December 2005 or January 200 - but in fact everything stalled. Nothing was paid to Portugal, and not a single share was transferred to Mozambique.

The Portuguese excuse was that the deal had to be agreed by the European Union's independent statistical agency, Eurostat, which was investigating whether the sale violated Portugal's obligations under EU treaties.

Presumably Eurostat has finally given the go-ahead, for AIM's source was confident that the memorandum will now be implemented, and an agreement containing all the details will be signed.

"Everything indicates that the end of this month, more specifically 31 October - or 1 November, if delayed - will be the final date for signing the agreement that will allow a tranquil handover of HCB to the Mozambican state', said the source.

"I believe that 31 October will be the final date', he declared. "I can assure you that nothing will go wrong this time, because Portugal wants to conclude this issue".

Mozambican Energy Minister Salvador Namburete visited Portugal recently to finalise "a few details" meant to speed up the handover, bearing in mind that the deadlines fixed by the November 2005 memorandum have already expired.

AIM's source could not comment on the expiry of the deadlines, only saying "what is important is that with or without delay, HCB will be turned over to the Mozambican state within days".