Somaliland set to usher in major multi million port investment

[Xaaji Xunjuf]

Somaliland set to usher in major port investment

 

Somaliland_medium

 

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The breakaway state is finalising a huge port investment, boosting its efforts to serve as a trade hub between the African and Arab worlds

Somaliland is finalising a multi-million dollar deal with a leading international operator to develop a port at Berbera, on the Gulf of Aden, bolstering the breakaway nation’s bid to position itself as a export gateway for landlocked Ethiopia, according to an envoy working on the deal.

“After six months of negotiations, an agreement has been put on the table, which is highly exciting, from one of the world’s best port operators,” says Jason McCue, a human rights lawyer who serves as an envoy for the state’s bid for independence, and who is assembling investors to grow the coastal town of Berbera into a $2.5bn logistics hub. “The moment is there for Somaliland.”

Mr McCue declined to comment on the size of the port investment, but says it would constitute the single biggest inflow of foreign direct investment in Somaliland’s 22 year history of de facto autonomy. “We are talking hundreds of millions,” he tells This is Africa. “That port will become a major international port.”

Authorities in the desert state are trying to overhaul crumbling infrastructure as they seek to capitalise on their position as a bridge between Africa and the Middle East. Kuwait recently spent $10m reinvigorating the nation’s two airports, and the government in Hargeisa has plans to develop road networks and an oil pipeline to service the export needs of neighbouring Ethiopia. It hopes that the port at Berbera can compete with Djibouti, Mombasa and Dar es Salaam, where ships can wait weeks to unload their cargo due to bottlenecks

Ethiopia is Africa’s second most populous nation, with 91 million inhabitants, and has annual exports worth almost $1bn, led by coffee and gold.

“We are trying to see how we could get international partners to help us with infrastructure. We want to develop the corridor between Berbera and Ethiopia because that is really the lifeline,” says Somaliland’s foreign minister Mohamed Bihi Yonis. “We are all aiming at Ethiopia and we believe that we could provide support to a third of the population of Ethiopia.”

This kind of large-scale investment may bolster Somaliland’s attempts to gain international recognition. The state unilaterally declared independence when civil war erupted in Somalia in 1991 and is officially seen as an autonomous region rather than a country. But it has held a series of democratic elections, has its own currency, and is a haven of relative refuge from the terrorism and piracy that afflict Mogadishu’s government. As well as targeting infrastructure investors, the government has ushered in frontier oil companies like Genel Energy, which are exploring Somaliland’s potentially huge reserves. But like Somalia, the nation is hampered by the fact that it has no access to international financial services.

“There is almost an inevitability occurring [around the independence bid], as Somaliland creates this financial self-sufficiency,” Mr McCue argues. “When big international companies come in, who have immense power in the states where they are from, they are going to demand that their home state pushes for [somaliland’s] independence, because they are going to want to operate in a normal financial services market.”

Hargeisa’s foreign minister says that “dealing with the rest of the world in terms of investments and development and security” is proof that the region is fulfilling the criteria required of a country. “We believe that we will get recognition soon, because we have done well,” he claims.

But sources close to talks between Somalia and Somaliland tell This is Africa that a new government in Mogadishu shows little indication of changing its stance by recognising the breakaway region’s right to independence.

Somalia has contested oil licenses awarded by Somaliland’s Hargeisa-based government, saying they infringe on old concessions awarded by the federal government before 1991. A draft petroleum bill says the central government alone has the “privilege to distribute natural resources”.

Somaliland could wait a while longer before it gets the recognition it has been hankering after for two decades.

 

http://www.thisisafricaonline.com/Business/Somaliland-set-to-usher-in-major-port-investment?ct=true

[spartacus]

great stuff!

[Xaaji Xunjuf]

indeed Berbera port has the potential to become a major commercial hub in East Africa

[burahadeer]

Waan in la qarameeyaa:D

[Alpha Blondy]

the issue here is as follows.........many international companies have expressed interest in managing the port, lakinse the SL government appears to have concerns.

 

is this a good thing or a bad thing?

[Hawdian]

^ To have the port managed by an int. company who has the resources and knowhow to invest in Berbera is the way forward . The Somaliland Gov seems to be doing the right thing . The Somaliland - Ethiopia corridor is lifeline for both countries so its vital this agreement is signed and finalised . Somaliland is open for business and welcomes foreign Investment in the country.

[Xaaji Xunjuf]

Ofcourse there are concerns the amount of investments what company should it be leased to how will it be managed for how long,berbera has allot of potential its located in a very strategic place.

[Alpha Blondy]

Hawdian;990664 wrote:

^ To have the port managed by an int. company who has the resources and knowhow to invest in Berbera is the way forward . The Somaliland Gov seems to be doing the right thing . The Somaliland - Ethiopia corridor is lifeline for both countries so its vital this agreement is signed and finalised . Somaliland is open for business and welcomes foreign Investment in the country.

Cali Xorxor is more important to the Kulmiye Zionist regime than a international company. these guys are amateurs. they haven't a clue.

[OdaySomali]

I'll believe it when I see it.

[Xaaji Xunjuf]

^^ No one is forcing you to believe it.

[N.O.R.F]

Good news. Let's hope this happens as it would make SL strategically important for the Ethiopia-China trade corridor.

[Abu-Salman]

N.O.R.F;990799 wrote:

Good news. Let's hope this happens as it would make SL strategically important for the Ethiopia-China trade corridor.

There was the usual suspect Bollore but it seems confirmed now by the bilingual regional intelligence network;

let's hope those French monopolising African assets will build/lease to at least similar standards and environmental norms as Dubai Ports in Djibouti:

 

 

 

08/11/2013

The Indian Ocean Newsletter N°1367

 

SOMALILAND

 

Bolloré pushes for port deal before 2015

The French group is keen to sign the contract for operation of the port of Berbera before Somaliland’s presidential elections in two years’ time. [187 words] [€5,2]

 

MENTIONED IN THIS ARTICLE: Bolloré Africa Logistics | Ahmed “Silanyo” Mohamed Mahamud | Ali Ismaël Hassan | Eric | Melet | Jason Reynard | Richard Mugni | Simon Minkowks

 

africaintelligence.com

 

 

Why the eagerness before Silanyo end of term though and what about Chinese numerous stakes in the heavily upgraded Djibouti-Addis corridor (ports shareholding, huge rail project etc)? Would the Ethios supply cheap hydroelectricity too as in Djibouti? Surely, such a milestone towards infrastructure and local economy should be as public as possible even though the current team in Sland seem more transparent...

[Xaaji Xunjuf]

Madaxweyne ku-xigeenka Somaliland iyo Dawladda Faransiiska oo ku dul shiraya Markab Badda Cas taagan..

 

December 15th, 2013 12:31 PM | NEWS

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bre-300x300Hargeysa(SBN) Madaxweyne ku-xigeenka Somaliland C/raxmaan C/laahi Ismaaciil Saylici oo ay weheliyaan masuuliyiinta Gobolka Saaxil ayaa kula shiraya Dawladda Faransiiska Markab weyn oo saaka ka shiraacday Duleedka Dekedda Berbera.

 

Lana oga ujeedada shirka u dhaxeeya Dawladda Faransiiska iyo Somaliland, hase yeeshee sida ay waaheen ku heshay ilo wareedyo xogogaal ah waxa manta magaaladda Berbera laga dareemayey diyaarado kuwa dagaalka ah oo ilaalinya Markabka Faransiiska.

 

Madaxweyne ku-xigeenka Somaliland ayaa sida ay wararku sheegayaan waxa ku wehelinaya gudaha Markabka saraakiil ay ka mid yihiin Taliyaha Ciidanka Ilaalada Xeebaha, Maareeyaha Dekedda Berbera Eng: Cali Xoor xoor, Maayarka C/shakuur Cidin iyo masuuliyiinta Gobolka, laakiin lama oga dhinaca Faransiiska cida saran Markabka.

 

Ilo wareedka Waaheen warka siiyey waxa ay sheegeen in ay Markabka markii uu fuulay Madaxweyne ku-xigeenka Somaliland uu u shiraacday dhinaca Badweynta gaar ahaana waxa la sheegayaa deegaanka Karin in ay ku sugnaayeen halkaas oo la filayo illaa afarta galabnimo in ay ku sugnaan doonaan.

 

Dawladad faransiiska ayaa aad u danaysa Somaliland, waxaanay la leedahay xidhiidh joogto ah iyadoo hawlgalo ka samaysay Aasaarta Taariikhiga ah, Arrimaha dhinaca la dagaalanka Argagixisada iyo budh-cad badeeda, waxaana lagu wadaa kulanka socda in ay arrimahaasi ka mid yihiin.

 

Dhinaca kale, waxa maalmahan soo baxayey in Shirkadd Faransiis ahi ay danaynayso in ay la wreegto maamulka Dekedda Berbera, iyadoo ay soo baxayaan warar is-khilaafsan oo midkood sheegayo in ay Qaybo ka mid ah Xukuumaddu taageersan yihiin in lagu wareejiyo, halka kuwo kalena ay ka soo horjeedaan.

 

Arrinta maamulka Dekedda Berbera ee ay shirkadda Faransiiska ahi doonayso ayaa la sheegayaa in Xukuumaddu si weyn ugu kala jabtay, illaa hadana ma jiro war rasmi ah oo ay ka soo saareen arrintaas, iyadoo ay dhawr jeer soo noq noqdeen saraakiisha Shirkadda Blore oo maamusha dekeddo ku yaala Qaarada Afrika…

[Xaaji Xunjuf]

Bolloré in talks for Somaliland port

 

 

Bolloré Africa Logistics today confirmed that it was in negotiations with the Somaliland authorities to develop a port in Berbera, on the Gulf of Aden.

 

“The Berbera port has indeed caught our attention,” CEO Dominique Lafont told Port Finance International. During an interview in London, he explained that such a project could ease trade in and out of Somaliland, a breakaway Somali state.

 

The port could also act as a gateway to neighbouring landlocked Ethiopia, Mr Lafont added. With a population in excess of 90 million and a growing influx of foreign investments, Ethiopia is bound to play an increasing role in East Africa, he noted.

 

“We therefore started negotiating with the Somaliland authorities several years ago. These negotiations have been through various twists and turns. For the second time, we are getting closer to conclusion,” Mr Lafont said, before insisting that talks were ongoing and that nothing was settled yet. “We are fully aware of the highly entrepreneurial aspect of this concession.”

 

Bolloré Africa Logistics is the number one operator in Africa, both in terms of ports (15) and TEUs handled. Its boss explained that the French group’s strategy consists in combining the sea ports it holds in concession with the inland logistics network it operates “so as to open up African economies.”

 

“With Ethiopia, we have a textbook case, as it is a totally landlocked country with a huge potential,” Mr Lafont said.

 

Somaliland unilaterally declared independence from Somalia in 1991 and is trying gain international recognition.

 

For Bolloré Africa Logistics, the Berbera project is part of a wider strategy. The group, which has a strong port presence in western and central Africa, wants to expand those port activities to eastern Africa, where it already has logistics activities. In recent years, it won port concessions in Moroni (Comoros) and in Pemba (Mozambique).

 

Besides this “Pan-African axis”, Bolloré has ambitions beyond Africa. A few months ago, it made its first port investment outside the continent: it acquired a minority share in a container terminal in Tuticorin, on the southern tip of India.

 

Mr Lafont told PFI that Bolloré Africa Logistics is looking at opportunities elsewhere on the Indian subcontinent, in South-East Asia, and in parts of Latin and Central America.

[Abu-Salman]

1. (SBU) At a September 16 dinner organized by the French

Ambassador, representatives of the French firm Bollore Group

briefed the British, EU, and U.S. heads of mission on a

proposal to rehabilitate and operate the port of Berbera in

Somaliland. The Bollore Group representatives reported that

the proposal had been in development for months, and that a

draft of their final proposal had been presented to

Somaliland President H.E. Dahir Rayaale Kahin earlier that

day. The company representatives and the French Ambassador

also indicated that the proposal has the firm backing of the

Ethiopian government, including PM Meles.

 

2. (SBU) In brief, the Bollore Group proposes substantial

investment to rehabilitate Berbera,s port infrastructure

including quays, storage, equipment, and organizational

overhead and systems, with subsequent operations of the port

to be handled by a new company with equity shares held by the

Bollore Group, the Somaliland government through the Berbera

Port Authority, and the Ethiopian government. While the

company representatives were vague regarding specific

shareholding arrangements, they indicated that the Bollore

Group would hold a sufficient percentage as to assure

management control and sound commercial practices. (Comment:

The implication of the presentation was that negotiations

remained regarding specific share interests. End comment.)

The company indicated that their business plan was based on a

goal of attracting 30 percent of the traffic in the area over

10 years, primarily consisting of imports to Ethiopia with

some export traffic, in direct competition to the area,s

current primary port in Djibouti. The Bollore Group already

operates or supports a number of African ports, and through

the new Berbera port company would help facilitate customs

and transit procedures in Berbera and Ethiopia, the latter

with support of a &dry port8 facility to be built at or

near the border. As well, the Bollore Group will help

develop a commercial and marketing strategy for the port and

transit corridor.

 

3. (SBU) In response to questions, the company

representatives were very firm that insurance rates had

already been secured through Lloyds that would provide

adequate coverage at competitive rates, and they appeared

confident that they would be able to match or beat Djibouti

port rates and services relative to Ethiopian traffic. Among

other items, they noted a commitment to provide priority

berthing to respond to Ethiopian Shipping Lines (a

state-owned enterprise) recommendations to ensure good

Ethiopian shipping services.

 

4. (SBU) Discussions suggested the two major risk

considerations for the Bollore Group were adequate security

conditions to be provided to the port, apparently largely to

be supplied by the Somaliland government, and the road

running to the Ethiopian border. The Bollore representatives

reported they had undertaken an assessment of the road, and

it would clearly need upgrading and reinforcement to handle

effectively the anticipated traffic loads. Development of

the road was not included in the Bollore proposal, with the

suggestion that the Group was looking to potential donor

funding, specifically European Union financing, for this

project.

 

5. (SBU) The Bollore Group's proposals were supported by

extensive documentation and plans. The group reported strong

support in Somaliland and Addis Ababa, and they appealed for

general support for the project by European and American

governments.

 

6. (SBU) Comment: Obviously the idea of a viable second

ocean port outlet would be appealing to the GOE. Enthusiasm

in Addis for the project would be fairly easy to generate,

particularly if such support came at low financial or other

risk to the GOE, which would seem to be the case. Likewise,

if successful the port operation would almost certainly

become the primary source of revenue to the Somaliland

government, presumably with attendant support from that

quarter. It is unclear what significant commercial

arrangements would remain to be negotiated beyond the

specific share composition of the new port operating company,

but the Bollore company representatives did not appear

particularly concerned on that score. The major remaining

variables clearly center on minimally acceptable security

conditions, and the corridor road development. In fact, the

 

ADDIS ABAB 00002285 002 OF 002

 

 

Managing Director of Ethiopian Shipping Lines recently

expressed concerns about these two issues to Embassy

officers. If the latter is assured by the EU and/or other

donors, the major remaining factor would seem to be an

assessment of security conditions. The Bollore Group reps

indicated the Group is no stranger to questionable operating

environments in Africa, including security issues, but the

Group obviously still is keeping an eye on this area. No

specific requests were addressed to the U.S. government

during the presentation, although EU support for the road,

and active British support were clearly desired. End

comment.

MEECE

 

 

http://www.wikileaks.org/plusd/cables/09ADDISABABA2285_a.html