NOUAKCHOTT PRIVATE DEAL PAIN
COMMENT: The saga at the port of Nouakchott, Mauritania, continues, underlining the point made in the last of issue of PS that negotiated port deals, as opposed to the letting of terminals via public tender, are inherently risky and do little for the public good, writes Mike Mundy.
The Parliamentary Investigation Committee (CEP) established by the current Government of Mauritania to look into the economic management of the country under the former Mohamed Ould Abel Aziz regime has recently published a provisional report that recommends the PPP agreement privately negotiated with Arise, an entity jointly held by Olam International and African Finance Corp (AFC), be renegotiated or as an alternative to this the government should withdraw from the agreement.
Arise following a reorganisation now has three arms: Arise IIP, under which sits the Nkok Special Economic Zone in Gabon plus its planned operations in Benin (Glo-Djigbe) and Togo; the second vertical structure is Arise Infrastructure Services, which is involved in airports and highways, and is controlled by Olam International (40.5 per cent), CDC Group (38.5 per cent) and African Finance (AF) (21 per cent).
The third structure is Arise Ports and Logistics which includes the port of Nouakchott, the mineral port of Owendo and the San Pedro Multipurpose Industrial Terminal. It is this latter entity – the one now under scrutiny in Mauritania in conjunction with Nouakchott – that AP Moller Capital has acquired a 43 per cent stake.
The recommendations made by CEP are justified in the following statement: the agreement was “prepared, negotiated and signed under exceptional circumstances marked in particular by rushed and sloppy administrative processing; suspicions with regard to the relationship between Arise and the signing interdepartmental committee made up of the Prime Minister, the Minister of Equipment and Transport, the Minister of Oil and Gas, Energy and Mines and the Minister of Economic Affairs and Finance; as well as glaring contradictions in the chronology of certain administrative and legal steps”.
Further, major points of concern highlighted in the detail of CEP’s findings include: the cost of the project – which at USD390m was felt to be high, tax benefits detrimental to the country, a lack of terminal performance minimum standards and the ability for the terminal to set pricing without restrictions.
Progressively port Nouakchott’s new container terminal development is standing out as a prime example of all that can go wrong with negotiated port deals as opposed to taking the more conventional and transparent route of a public tender.