Casualty of war decides to sleep with the enemy: Karl Maier met a Huambo hotelier with an eye for business openings in Angola provided by Unita guerrillas

BUBBLING with excitement was the only way to describe Alcides Goncalves da Cruz, one of a handful of Portuguese still living in the ruins of what once was Angola's second biggest city, the central highlands town of Huambo.

The reason was simple. Jonas Savimbi, whose National Union for the Total Independence of Angola (Unita) rebels control Huambo, had just sent a letter offering Mr da Cruz the pick of any hotel in town to rehabilitate. Not one to miss opportunities, Mr da Cruz sat down to think, the calculation being which of the city's main hotels had suffered the least in last year's 55-day battle for Huambo between Unita and the government of President Jose Eduardo dos Santos.

The problem was they had all been hit by mortar shells and rocket-propelled grenades, not to mention hundreds of rounds from AK-47 assault rifles. The battle left Huambo with a negligible water supply, and the only electricity is from a handful of generators. Even diesel to run them is scarce. But Mr da Cruz was positively giddy, showing off the letter, saying repeatedly: 'This came from Dr Savimbi.'

With Unita trying to establish Huambo as the capital of the 65 per cent of Angola it controls, Mr da Cruz and several dozen other businessmen are positioning themselves for a financial windfall. While Mr da Cruz is getting into the hotel business, others have organised convoys through Unita- controlled territory to the diamond-producing areas in the far north-east and to neighbouring Zaire and Namibia. The profit margin can be astronomical. A cow bought for dollars 100 ( pounds 67) near Huambo, for example, goes for up to dollars 1,000 in the diamond areas.

These are gritty, strident anti-Communists whose motto is, as Mr da Cruz said: 'The more difficulties there are, the better the opportunities.'

Mr da Cruz, born in Aveiro, Portugal, 49 years ago, came to Huambo in 1968 after serving three years as an infantryman with the Portuguese colonial army on the eastern front during the war for independence. He began working as a painter and then began to produce briefcases and luggage. These were the golden days of Huambo, to hear Mr da Cruz tell it, especially in the last years before independence when Portugal attempted to make up for centuries of neglect and exploitation by funding schools, hospitals and factories. The world did not appreciate the Portuguese contribution, he argues, and becomes irritated when reminded that, for promoting literacy and economic development in Africa, Portugal comes last among colonial powers.

By the Eighties Mr da Cruz had established the Grupo AGC, a consortium involved in the manufacture of light fixtures, clothes and food products. In 1983, Unita guerrillas stole his 150 head of cattle and economic crisis during the war ground down his company. Independence brought nothing but trouble, he said, but he has thrown in his lot with Unita, the movement that re-ignited civil war by rejecting defeat in UN-monitored general elections in September 1992.

During the battle for Huambo last year, Mr da Cruz loaded the wounded and dead on to his truck and took them to the Unita hospital. Since then, he has been looking for opportunities. When the Portuguese residents were evacuated by the International Committee of the Red Cross last year, Mr da Cruz sent his wife and three children to Portugal and stayed behind. 'I built this factory. I did not want to run the risk of being evacuated and losing everything.'

His first move was to convert two floors of his clothes factory into a small hotel. His kitchen and laundry are situated in a warehouse with 150 idle sewing machines. The hotel is doing steady business thanks to visits by journalists, church officials and aid agencies. Mr da Cruz is also seeking to rent out his warehouse to relief groups. 'I have to make the place pay for itself,' he said.