Back in the May issue of PS you may recall that there appeared to be some strange things going on with the concessioning of the Dakar container terminal in Senegal. Remember one of the qualifying technical criteria for parties to qualify to submit an Expression of Interest was to handle an overall total of 5m teu per year? How relevant was this to taking over a concession where under 500,000 teu per annum is handled? Did such anomalies raise suspicions that all was not as it should be as various parties approached the bid process – yes it did.
And so did the bidding process go smoothly – was it a happy ending? It appears not.
First of all let us look at the bid process. The port authority had rules regarding the submission date – ie how a bid had to be delivered (by hand) and by a given deadline.Such rules are not unusual but while “rules are rules” history shows in other concessioning processes that they are not always interpreted rigidly, and particularly when the party making the rules is likely to shoot himself in the foot if this approach is taken. It was interesting therefore that the port authority was very zealous in disqualifying at least one bidder for making the simple mistake of forwarding his bid for submission via courier rather than personal delivery.
The bidder concerned obviously didn’t read the small print at the bottom of the relevant page and/or may have lost this point in a translation. But was it in the port’s interest to exclude this party from the bidding process – definitely not if a serious developer ends up being excluded on a tiny technicality.
But perhaps more interesting is that this action may have served the interest of another party – another exclusion measure to narrow down the competition? It certainly leaves this aspect open to speculation.
So it is hardly surprising, factoring in the curious environment in which the bid took place, that the outcome has not been entirely straightforward. DP World was declared the preferred bidder but in recent weeks a formal challenge to this decision has been mounted by the Bollore port and logistics group. The basis of this challenge is not entirely clear at the time of writing but it is thought that one major factor Bollore is unhappy with is the fact that its €500m ($668m) bid was much higher than the winning bid. DP World has been reported in the media as spending $534m to upgrade the existing container terminal and build a brand new facility.
Where things go from here is difficult to fathom other than if they do go from this point to being caught up in legal action then it promises to be a long time before anyone gets to grips with improving Dakar’s container handling capability. Echoes exist here of the container terminal concessioning process that lost its way in Luanda, Angola where several years on there is still no resolution to the issue of who the appointed operator will be.
And clearly such a situation is not a healthy state of affairs for port users in Dakar. These latter parties are crying out for positive change and are quick to point out that currently the Dakar container terminal has many operational problems associated with it, including vessel delays, poor vessel working rates, long container dwell times and so on.
The slide of the Dakar container terminal into a problem arena is,however, not just a pity for port users in Dakar and interested investors.Arguably, it is bad for Africa as a whole sending out the wrong message about going to the time and expense of bidding on port projects on the continent.
Clearly, this is one project that would have benefited immensely from a concessioning process undertaken at arms length – a fully transparent process designed to ensure a level playing field and one that will deliver the right result.
After all, a result that is not a result is no result at all.
