DJIBOUTI NEC SITES - RESPONSE TO ASSEMBLY OF RELEVANT INFORMATION

UNCLAS SECTION 01 OF 04 DJIBOUTI 001660

SIPDIS

DEPT FOR OBO - ATTN THOMAS GRUBB

E.O. 12958: N/A
TAGS: ABLD AMG
SUBJECT: DJIBOUTI NEC SITES - RESPONSE TO ASSEMBLY OF
RELEVANT INFORMATION

REF: A) State 088579, B) State 237442


1. Post researched the topics raised in ref. B) and
provides the following responses.


2. REAL ESTATE
QA. Is Fee Simple land ownership available to the USG ? If
not, what other types of land interests are available ? If
a Crown lease or similar long-term lease is available, how
long is the usal term ? Are such leases automatically
renewable ? At what cost, if any ?


3. AA: The average land ownership fees are Djibouti Franc
(DF) 5,000 m2 in the area near the airport as well as in
Heron, provided one deals directly with the Ministry of
Finance. However, the fees could go up to DF 10,000/m2 in
areas such as Heron if one buys from a reseller. Mr.
Ibrahim Hamadou is the Director of Ministry of Finance.


4. QB. How well does the Land Registry System work there?
Are the records regarding land ownership reliable and
accurate ?


5. AB: The Land Registry System works well, through
Ibrahim Hamadou's department. The records regarding
ownership are reliable and accurate.


6. QC: Is there known corruption in that office ? Can a
prospective buyer expect that a true past and present
ownership record obtained from this office is correct and
not likely to be successfully challenged by a third party ?
Is there known corruption within the real estate market or
industry ? If so, please describe how it might be
encoutered by the USG and offer suggestions on how to avoid
it.


7. AC: Post cannot guarantee that corruption does not
exist. Post suggests dealing directly with the host
government unit in charge of the process. A prospective
buyer can expect that a true past and present ownership
record obtained from the Land Registry System is correct and
not likely to be challenged by a third party.


8. QD: If a use or zoning change becomes necessary for the
selected site, please describe the government office
involved and the general process for affecting the change.
How cumbersome is the process ? Is the
government/municipality cooperative or adversarial ?


9. AD: If a use or zoning change becomes necessary for the
selected site, please coordinate with the Director of the
Ministry of Finance (Ibrahim Hamadou). He should be
cooperative.


10. QE: Generally, what is the condition of the real
estate market ? Is it stagnant or robust or somewhere in
between ?


11. AE: The real estate market is high since Djibouti is
involved in the anti-terrorism campaign with the presence of
American, German, and other growing military and diplomatic
missions present in country.


12. QF: What is currently influencing supply and demand,
such as geography, investment in infrastructure, interest
rates, civil unrest, labor costs etc.


13. AF: Djibouti's strategic geographical location and
relative political stablity in an otherwise highly unstable
region account for the present influx of foreigners,
particularly Americans. Its port remains Ethiopia's
principal sea access, in the wake of Ethiopia's war with
Eritrea which closed off Asab. The present expulsion of
undocumented foreigners will cause labor costs to increase
markedly. Construction must be earthquake proof. Interest
rates are high. More generally, the real estate market in
Djibouti is very small. The Ministry of Finance indicated
that most of the land in the town of Djibouti is privately
owned. Therefore, the supply of land is very limited
irrespective of considerations such as geography, investment
in infrastructure, etc. Many people invest in land without
having necessarily the means to build. The demand for
housing is influenced by a growing population eager to own
property. The government has set priorities in social
housing programs. The Djiboutian government exercises a
strong influence on determining available real estate supply
in Djibouti city.


14. QG: Is land available ? Are vacant 10-acre parcels
likely to be available within a reasonable commuting
distance from where Post does business ? Generally, what is
happening there with various types of real estate ?


15. AG: The land available around the Embassy-and in
particular the price-is not completely clear at this point.
There are three lots surrounding the Embassy (fourth side
faces the water). On the south side, there is an empty lot
covering 8,464 m2 which is owned by the Saudi Arabian
diplomatic mission. They have not built on the lot and are
aware of the possible need for the American embassy to
expand. No selling price has been made and it would not be
surprsing if they asked for a high price given the lot's
market value. It is rectangular in form.


16. On the north side, along the beach front, is a lot
belonging to the Railway Company and currently used by the
Constitutional Committee. There is a medium sized colonial
style house on the land that is in fair condition. The
Ministry of Finance indicated this lot of 6,641 m2 is
negotiable if the USG is interested. A side street
separating the embassy compound and the lot exists and is
controlled by the embassy (rue d'Alexandrie). It is
rectangular in form.


17. Finally, there is the lot across from the embassy,
known as `Soleillet' which covers 2,800 m2. This includes
an abandoned, dilapidated building of 22 apartments and a
parking space behind the construction. No price has been
offered but it is subject to negotiation with the Ministry
of Finance, Ibrahim Hamadou. The building would have to be
demolished. Moreover, if this site were selected, the
street running in front of it and separating the lot from
the embassy compound (Boulevard Marechal Joffre) would
probably have to be preserved. An underground path, small
bridge or other structure would probably be necessary to
communicate with the embassy compound. The lot has, on one
side, a street on which different organizations and
residences are located. That street leads to the open field
of Plateau du Serpent where Djiboutian city dwellers would
be evacuated and assembled in case of an emergency.


18. These three lots taken together with the embassy
compound (15,400 m2),make for a total surface area of
17,905 m2. The shape of the combined lots would be in two
segments : one large, uninterrupted rectangle with a beach
front on one side, Boulevard Joffre on the other. The
second segment is a rectangular lot directly across from the
embassy and over Boulevard Joffre. The Government of
Djibouti would strongly resist closing Boulevard Joffre.


19. Vacant 10-acres parcels are also likely to be available
in the district of Haramous with presidential approval.
Haramous is a reasonable commuting distance from where post
does business (approximately 20 minutes away from the main
town),although not nearly as convenient as the present
chancery. Security considerations would make this option
unfavorable if chosen lots were in relatively isolated
areas.


20. LOCAL SERVICE PROVIDERS
QH: How available are technical services ? Are there
qualified engineering firms for geotechnical, civil,
environmental surveys ?


21. AH : The technical services are available via the
Ministry of Equipment and Transportation. Engineering for
geotechnical, civil, environmental survey is managed by Dr.
Alexandre Adam, Director of the Central Laboratory of
Building and Equipment, Tel/fax 35-11-68, BP 2372 Djibouti.


22. QI: Are there reputable law firms ? Please supply the
names and addresses of three (3) attorneys (one will be
hired soon).


23. AI: Martinet & Martinet
Mr. Alain Martinet et Marie Paul Martinet
Le Heron rue de Khartoum
BP 169
Djibouti
Tel: 35-28-79
Fax: 35-25-43
Email:martinet@intnet.dj

Maitre Jean Montagne
Rue de Pekin
BP 177
Djibouti
Tel: 35-21-51
Tel: 35-13-29
Email: montagne@intnet.dj

Maitre Hasna Barkat Daoud
Rue de Marseille near le Kintz
BP.1462, Second Floor
Djibouti
Tel: 35-73-74
Cell. 81-57-57
Email: cabinethasnabarkat@intnet.dj


24. QJ. Are there known and reputable firms that work with
host government or municipal officials on issues like town
planning and zoning.


25. AJ: No. Private firms get involved in the planning and
zoning unofficially. The Ministry of Habitat, Urbanism, the
Environment and Land Use decide who and where land can be
bought. Point of Contact :
Mrs. Amina Abdi, Director
BP: 11, Djibouti
Tel: 35-60-34 - 35-16-91
Fax: 35-16-16-18


26. There is also the Ministry of the Economy, Finances and
Planning, Head of Privatization.
Direction for Revenues and Estates, Ibrahim Hamadou,
Director. Tel: 35-3908. Fax: 35-65-87.


27. LANGUAGE
QK: Do government/municipal officials and employees speak,
read and write English ? If not, what is the common business
language ?


28. AK: The common business language is French.


29. QL: Are good translators easily available ? At what
cost ?


30. AL: Oral translators yes, written translators are
available but less numerous. Oral translators receive about
U.S. $20-30 per hour.


31. UTILITIES
QM : In general, please describe the city's infrastructure
and the relaiabilty of each utility : water, power,
sewerage, gas, telecommunications.


32. AM: It is fair to say that the water utilities are
generally reliable with some shortage during summer.
Investment is currently focused more on finding new water
sources than improving the water distribution system.


33. The power utilities use fuel energy so electricity is
quite expensive. However, there has been investment in
purchasing more generators, which has caused power outages
to decrease to a few hours per month during summer and
almost no outages during the cool season.


34. A few years ago, the government of Djibouti invested in
a system for evacuation of rain water. However, the
sewerage system is rudimentary and not reliable.


35. Djibouti enjoys one of the best telecom systems in the
region. It is reliable but expensive.


36. QN : Identify the companies/government agencies that
provide and manage utilities and provide contact names and
telephone numbers for each one.


37. AN: Water - Office National des Eaux
BP.1914
Djibouti
Tel: 35-31-07
Fax: 35-44-23
Mr. Abdoulkader Kamil Mohamed, Director General
Mrs. Zeinab Kamil Ali, Directrice Adjointe


38. During summer we run out of water.


39. Power - Electricite de Djibouti
BP.175
Djibouti
Tel: 35-28-51
Fax: 35-43-96
Mr. Djama Ali Guelleh, Directeur General


40. Djibouti faces power outages of few hours in summer.

Telecommunications: Djibouti Telecom
3 Blvd Georges Pompidou
Djibouti
Tel: 35-11-10
Fax: 35-57-57
Mr. Mohamed Kamil Ali, Directeur General


41. Djibouti telecom provides the following service:
telephone, mobile phone, internet, telex. These services
are reliable but expensive.


42. QO: Please advise if the City has any known public
works projects planned or underway that affect the supply,
capacity or future of utilities.


43. AO: None known.

44. OTHER PUBLIC SERVICES
QP: Is there adequate public transportation throughout the
city ? If not, what parts are best served ? Worst served ?
Is it considered safe, reliable, and affordable ?


45. AP: Public transportation in Djibouti is inadequate
and risky. Taxi cabs exist and are relatively inexpense,
but they are not considered safe or reliable.


46. QQ. What is the general status and availability of
police protection ? What is the general status and
availability of fire protection ? What is the general status
and availability of paved primary, secondary and tertiary
roadways ?


47. AQ: Police protection in the more populated areas is
generally available. The Police can be unreliable and
subject to extortion and other forms of corruption.


48. Fire protection is somewhat good, but unreliable due to
qat-chewing that weakens the responsiveness of firemen.


49. The primary road system is adequate but speckled with
potholes and in need of maintenance. The secondary roads
are impaired and sometimes impassable. Tertiary roads
require 4WD vehicles to pass. Large washouts, rock slides,
and other obstacles frequently block these roads.

Regards.

SMITH