Concessions: Proven Processes have the Best Potential to Deliver

There are two stories in this issue, one relating to Kenya and the other Sudan, which highlight government to government deals as a path to securing port concessions.

Maybe these two examples and this sort of approach in general have a value to them but it is hard to see any tangible evidence of this. Indeed, this begs the question, are there any such deals that have worked other than in the military theatre of operations?

The Kenya deal referred to in this issue appears to be running into what many might describe as a political minefield with opposition interests squaring up to the outgoing government over what it suggests is a secret and corrupt deal incorporating multiple port assets. Clearly, this story has a while to run yet and there will be more accusations followed by counter claims as well as other parties such as trade unions getting involved.

Perhaps the thinking is the ‘prize is worth the pain’ by the proponents of this deal but given its political high profile, the fact that it was being shaped below the radar and Kenya’s past record of corruption in its port sector, it is surprising that endeavouring to secure port concessions by a government to government route under the mantle of a ’Economic Cooperation Agreement’ with the United Arab Emirates (UAE) is considered to be a viable option. The ingredients are there that make it an ‘accident waiting to happen,’ particularly if news of the deal broke in the last days of the current government, as has proved to be the case.

The Sudan project, involving Abu Dhabi Ports, also has a lot of misfire potential about it, not least that for it to proceed it would have to ignore the exclusivity agreement in a legally binding concession secured earlier with the Government of Sudan. Equally, it will be interesting to see how the unions and other interested parties in Sudan’s existing main port, port Sudan, react to the idea of an entirely new competing entity. As the existing port workforce has proved previously, it has the power to significantly influence government thinking when it sets its mind to it.

The fact that that what can be termed government to government deals take place not on a local but a national stage significantly ups the potential for such projects to become very complicated. As the two stories in this issue convey, there are also usually a raft of other factors that come into play, which are difficult to manage and have the potential to reap significant damage.

Properly managed international tender processes, open to properly qualified parties, conducted according to a tried and tested set of rules, are the cornerstone of successful concession processes on a global basis. The positive track record of this approach speaks for itself as does the limited success of alternative approaches.