Somaliland :The Port deal with Bollare lacks Transparency

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IMG_0031By Muna Mohamed Jama

As you’re all aware of Berbera port authority has been deprived of the assistance of world developing agencies like the World Bank, IMF or bilateral funds available from developed governments. The Berbera port authority is severely restricted in its capacity to invest in new equipment because majority of the equipment used in seaports is very expensive and costly in maintaining the equipment’s services.

Since coming to power nearly four years ago, the current government and officials from Somaliland Port management believe the privatization of Berbera ports will pave the way for the modernization of port facilities and boosting Somaliland efforts to serve as a trade hub between the African and Arab worlds

The decision to privatize the port facility attracted interest from a number of sectors including Global port operators such as Hutchison Port Holdings (HPH), APM Terminals, and PSA International may also wish to participate in any bidding in a view to expand their Red Sea portfolio.

As things were starting to look up for the port and before any bidding took place, we started seeing headlines which read as follows:
“Hargeisa has instructed a British lawyer to negotiate with the French group Bolloré to hammer out the details of the agreement to manage Berbera port”

Meetings began about two weeks ago between representatives of Bolloré Africa Logistics and the British law practice McCue & Partners to work on an agreement for the French group to run Berbera port. In fact, several months ago the Somaliland government instructed the firm’s main partner,Jason Daniel McCue, 44, to look for funding to develop the Berbera corridor towards Ethiopia. This is a vast project including an oil pipeline, estimated to cost a total of around $2.5 billion. This mandate was attributed to the Berbera Development Company (BDC) founded by McCue in London in April 2013 to make the Somaliland port into a logistics hub for the whole region.

McCue and BDC have consequently also become Bolloré’s primary contact points for Somaliland. BDC has three directors in addition to McCue, who is interested in security via his MODA Alliance Group. They are the Britons John Richard Moore, 45, who heads John Moore & Co and Ibrahim Ali Yusuf, 41, plus the Canadian Ahmed Mohamed Abokor, 48. The latter lives in Djibouti, where he is in partnership with the businessman Mohamed Said Guedi in the company Afro Shnagai-Djibouti. He is also one of the directors of Pontus Marine Ltd (ION 1359) – an industrial fishing company in Somaliland founded last year in London – alongside the British lawyer from Somaliland, Mohammed Yusef who is moreover the founder of Invicta Capital. Pontus Marine has one heavyweight as a non-executive director: the Conservative MP Henry Bellingham, a former Parliamentary Under Secretary of State at the Foreign and Commonwealth Office in charge of African affairs.

 

 

After reading above news, one thing immediately comes to mind Berbera Development Company ,the company which Somaliland government has mandated to turn the Somaliland port into a logistics hub for the whole region and after browsing the net for more information about the company tasked to lobby for investment worth $2.5 Billion will lead you to something like this http://www.berberadevelopmentcompany.com/

This shows the need to clarify outstanding issues regarding the real identity and role of all those mentioned above of whom the Somaliland public know little or nothing expect two and what is there connection with Somaliland government in the deal when the issue, like that raised here , is one of transparency with regard to the proposed secretive port deal and which means if we are experiencing problems with transparency regarding the deal now, one can only imagine what it will be like when the deal is finally signed.

It certainly will not create transparency because if we are having trouble now, the fact is that once the port of Berbera is declared private entity then the Parliament and other governmental organs will find it extraordinarily hard to inquire into the management of that national asset.

Whatever is in the secret port agreement that the current government would want to sign with the new port owner-operator that would be the final deal. If something is not in the contract, there will be no way for a future Somaliland governments or Parliament to influence what is happening in the port, so anything is possible.

It’s clear that there is a sinister plot to rip-off Somalilanders of their national wealth ,no doubt we are not allowed to see that agreement until after it is signed that’s why the current Minister of Foreign affairs Mr. Mohamed Bihi Yonis usually dodges investigative journalists who have being trying to raise the subject. Transparency will be much more difficult under such arrangement. Will it result to a better competitive outcome? I would not imagine so.

If a new owner was to get acquisition of the port from the current government, even at book value it would not be satisfied with that. Bollare Africa logistics will as norms want to squeeze some more juice out of the orange, and there are only a few ways you can do that. One way is to start jacking up port user fees, which of course will have a great impact on local exporters and importers.

The local livestock exporters should be worried about a new private owner of the port of Berbera will be squeezing even more out of them by way of port fees. Things can only get worse under private ownership of the port.

The third point, a new private port owner will be in a position in which they will try to squeeze more profit out of what is, , a well-run port, is exactly the type of thing we should be warned about in here, such as casualisation of the workforce in other words they ‘re in a position to introduce modern mechanized capabilities(Robots) which will pave way for the laying off of port workers one.

Whatever is in the agreement that a punitive KULMIYE government would want to sign with the new port owner-operator that would be the final deal. If something is not in the contract, there will be no way for a future Somaliland administrations or Legislative body to influence what is happening in the port , so anything is possible hence the need to be informed of the concessions made by the government. No doubt we will not see that agreement until after it is signed. Talk about deals shrouded in secrecy not to mention the proposed port privatization will be a multibillion-dollar deal that will be shrouded in secrecy until the deal is done.

 

 

 

7 COMMENTS

  1. I cant believe this well written piece attracted no comments from the readership. I think people abandoned SLP when the quality of the site took a nosedive a little while ago. It is on the up again so lets hope the readers come back. Thank you Muna you are one of the first Somaliland writers on here that made an attempt to provide evidence to support your claims. The rest just let rip in that clan-hate rush of blood to the head that is the hallmark of our race. Of course the deal lacks transparency. But that is because we are not negotiating from a position of strength. Indeed it is no exaggeration to say that the world is against us (and we dont help ourselves either with our childlike bickering) Everytime a major game-changing deal gets close, the US State department issues a Statement reaffirming its support for a ‘Unified Somalia’. The UN issues ‘reports’ about all kinds of evil-goings on Somaliland. Little Djibouti flexes its puny muscles in IGAD demanding AMISOM should be stationed just outside Hargeisa. The Arab League pronounces on the ‘soverignty and territorial integrity’ of Somalia even as the ones in their heartlands disintegrate. The would-be investors get spooked. This happened time and again with the Chinese sas explorations, Chinese port building company, Genel and now Bollore.
    I think if we pulll off Bollore deal, even with murkiness or lack of transparency (although I put to you sis Muna you exaggerated both a little, as good opinion writers often do) it will be a strategic game changer for Somaliland. Other companies will be encouraged to take plunge which in turn will give us more negotiating parity. It will further cement our friendship with Ethiopia, vital for our existence. It will create thousands of jobs and boost governement revenue strenthening our hand in our negotitaions with countries like Turkey who desperately want us gobbled up by Mogadshu to make them feel succesful and influential.
    Please support the Bollore deal Muna. Write an open letter to them saying how peaceful and wonderful Somaliland is despite the apearance of mad people and evil climate. Our nation NEEDS this deal. Almost at any cost.

  2. First of all, I would like to congratulate Muna for well written article and bringing a national issue to forefront. We need to see more of this. Yes i am also surprised that not many comments were received as this shows these days people are only interested ‘mediocre’ politics as opposed key issues like this.

    Secondly the issues highlighted is transparency and integrity as to who will be leading the way for such an important source of national revenue. I have been following this project myself and apart from the FM Bihi and a couple of Ministers there was no official report as to what the project entails, explaining the benefits and pitfalls (if any) for the public.
    This shows how the current government lack competency and transparency. Not surprisingly the public will feel indignation and anger to Silanyo and his party.

    Elections are coming up and I doubt Kulmiye will be trusted to govern this country again.

    • Silanyo’s government is deaf and mute. And when it comes making use of modern communicatioon means, it remains in the dark ages. I recently saw a ‘defense’ by a KULMIYE flunkey of the FM. The speaker weas denying that FM tweeted something about the President’s health. The flunkey said this on Somaliland.org ” The FM did not tweet anything. The FM does not have a Twitter account. He never used twitter in his life”. My jaw dropped to the floor. It was the most astonishing admission of incompetence imganiable. it borders on criminal neglect. This whole govt does not have a single, manned working website.

  3. Good job sister Muna. Nothing can be added to enhance this perfect article. Allah bless you and protect Somaliland against all evils.

  4. BTW Muna I dont think there is anything corrupt or sinister going on at all. Silanyo govt has many weaknesses but corruption is not one of them. Lack of transparency does not always mean dastaradly goings on. I also belive it was in the national interest to keep the discusions as low profile as possible for as long as possible. This was to shelter the project from our numerous enemies who would have then tried to scupper it at any cost. Now it is out we must speak with one voice and tell Bollore: You are welcome here. If Bebera is not rebuilt, it will wither and die like Zeila and Bulohar did. Somaliland will wither and die too as Saudi Arabia, always looking for ways to smother us to death simply legislate that all its livestock imports go through the purpose-built livestock export facility at Dorale. That will be the end of somaliland as we know it. This project is existential. No exaggeration.

  5. Let’s be pragmatic and strategic. What is Somaliland port perspective development today? We will all agree that this perspective is very limited due to the diplomatic status of the country.
    Therefore, the country needs a risk taker as no investment coverage is provided by international insurances and funding organizations for this deal. In the current business atmosphere, major companies are not willing to engage in such an adventure. However, I do agree that this issue should not affect the capacity of the parliament (duly elected) to ask government for complimentary information about the deal and its repercussions on the economy.
    The question is, what kind of port does Somaliland want ? A modern one or an outdated one.
    If the answer is the modern one, then investments have to be made to upgrade the existing infrastructures and services ( port, Road, Energy,…..) and the list is very long. It will raise opportunities for new activities, new cargo volumes and will surely affect the current tariffs, social and economy structure. The question is, will these opportunities create more value to the country and will they achieve a development that is strong enough to absorb the structural change of working conditions, port tariffs, commodities prices, ……..
    I strongly believe that the answer is yes.
    You can not stick to past conditions will looking for a completely different future, it’s called boldness and this what Somaliland needs. I urge you to leave these anxious and uncertain way of managing business and social issues to European countries that are not confident in their future. Somaliland can only get better if it is believing in its capabilities. Furthermore, you can always ask an investor that is making many for a better profit share but you can never ask a bamkrupt investor for a shelling.
    Be positive and if you have doubts, always remember that in the beginning of DP world project in neighboring Djibouti, Djiboutians where having the same fears and now they call Dp world and its container terminal+freeZone a blessing.
    Assalamou Alaikoum oua rahmatou lah

    • Abu Khayer I completely agree with you. If Bollore wobbles and chickens out of this potentially game-changing venture or Somalilanders kill the deal off with their adolescent-like bickering and quarels, it will be a historically bad move for Bollore, French business in Africa, Ethiopia and South Sudan. It will be disastrous for Somaliland, potentially existentially fatal. Once the custom-built livestock exporting facility at Dooraale is completed, the Somaliland-hating Saudis will simply refuse anymore livestock exports from Berbera. The port will suirvive for few more years but as Somalilnd busineses also start using Doorale for importing goods , Bebera will be abanadoned. it will die within about ten years and Project Somaliland will die with it. For Bollore the consequerequences will not be as dire but it will show them as timid and adventure-shy. It will deny them their presence on the east coast of Africa. It will lose them a strtategic opportunity to grab a slice of what could be the fastest growing economy in Africa in the next 50 years – Ethiopia. Other French businesses will lose out too as China roars ever deeper into Africa and risk shy Western companies dither. Lets hope Bollore’s current leaders have the courage and vision to see the bigger picture and go ahead with this project

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