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04DJIBOUTI1498 2004-11-22 12:36:00 CONFIDENTIAL Embassy Djibouti
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					C O N F I D E N T I A L SECTION 01 OF 03 DJIBOUTI 001498 



E.O. 12958: DECL: 11/18/2014



REASONS 1.4 (B) AND (D).

1. (C) Summary: Sultan Ahmed bin Sulayem, Executive
Chairman of Dubai Ports, Customs and Free Zone Corporation
(the parent company to Dubai Ports International which
manages Djibouti's existing maritime port and airport), has
put forward a proposal that the U.S. military, based at Camp
Lemonier, assume control in its entirety of Djibouti's sole
airport at Ambouli. In exchange for such control, the U.S.
military would construct, at its own expense, a new civilian
international airport that would support what Sulayem
anticipates will be a growing tourism industry in Djibouti.
Sulayem broached the proposal during a November 16 meeting,
at his request, with Ambassador and Major General Samuel
Helland, Commander of the Combined Joint Task Force-Horn of
Africa. Sulayem said the expected influx of business and
tourist travel through Ambouli airport might form a long-term
security threat to Camp Lemonier, thus making more valuable
U.S. control of the Ambouli facility as an airport
exclusively for military use. Sulayem's initial proposal did
not include a clear role for France or its existing
interests, preferring to leave the matter to the U.S.
Sulayem's proposal is blessed by Djibouti's aggressive and
key businessman Abdurrahman Boreh, who, with the Government
of Djibouti and with Dubai Ports, Customs and Free Zone
Corporation, are investing USD 120 million in construction of
Djibouti's new shipping port, now under construction, at
Doraleh. It is not clear, however, if the proposal is
blessed by Djibouti's President Guelleh. A meeting between
Guelleh and Sulayem, that also would include Boreh, was
scheduled for the same evening. There are important residual
issues in Sulayem's proposition, such as presidential
concurrence and our relationship with the French. There is
also the nuts and bolts matter of cost and benefit to the
U.S., which must ultimately drive the stance we take. End

2. (C) Sultan Ahmed bin Sulayem, Executive Chairman of Dubai
Ports, Customs and Free Zone Corporation (the parent company
to Dubai Ports International which manages Djibouti's
existing maritime port and airport), accompanied by
Djiboutian businessman Abdurrahman Boreh and current General
Director of DPI entities in Djibouti, David Hawker, met
November 16 at the Embassy with Ambassador and Major General
Samuel Helland, Commander of the Combined Joint Task Force
Horn of Africa (CJTF-HOA). The meeting was at Sulayem's
request, ostensibly to discuss the future of DPI in Djibouti
and how its operations might affect Camp Lemonier, as well as
the new Doraleh port now under construction (see reftels), in
which Sulayem's company, the Government of Djibouti and Boreh
are investing USD 120 million. Pol/Econ Officer sat in as

3. (C) Sulayem initiated discussions by making the point that
Djibouti is in need of an updated international airport which
could service an expected influx of business and tourist
traffic once Djibouti's new Doraleh port comes on line. He
detailed the interest of Dubai Ports, Customs and Free Zone
Corporation in investing in Djibouti through development of
the country's tourism potential. It would be his company's
preference to cater to the high-end luxury tourist and
business traveller, constructing hotels and recreation
facilities for same. In Sulayem's view, natural growth
stemming from traffic coming into and out of the Doraleh
port, would significantly increase flight volume into and out
of Djibouti. This, in Sulayem's opinion, would not create an
ideal security environment for Camp Lemonier, now based on
the perimeter of Djibouti's existing single-runway civilian
and military airport at Ambouli.

4. (C) Sulayem said he believed the U.S. military would be in
Djibouti for many years to come. In addition, the U.S. Navy
has contracted to lease at least four fuel storage tanks at
the new Doraleh port, which will come on line between April
and June of 2005. Thus it is likely that Qatar, Kuwait and
other Gulf countries would increasingly have less future
appeal to the U.S. military for its security needs. He
continued that Djibouti is ideal because of its strategic
location, stable government and relative safety. In such an
environment, the military would naturally want to expand its
base of operations and the logical location would be at the
existing airport where it currently is billeted.

5. (C) Ambassador asked Sulayem what would he propose, in
the scenario given, one do with the French military, which
also has basing facilities at the current airport? She
continued that Djibouti has already agreed in principle to
grant France an additional 21 hectares at the current airport
in order to help France meet its stated desire for added
berthing and aircraft staging space. Sulayem responded that,
unfortunately, "France would have to be your problem."

6. (C) Boreh interjected that he was aware of the agreement
in principle in French, and appeared to confirm its
existence. He continued that this is why Djibouti so badly
needs better coordination between its various sectors. He
said it was his intention to raise with President Guelleh,
during a meeting he and Sulayem would have later that
evening, the "mixed signals" Djibouti sometimes sends because
of a lack of coordination.

7. (C) Leaving aside the issue of France for the moment,
Sulayem went on to say that it would be easier to move the
civilian airport to a new location than to move the U.S.
military base and expand the existing airport. The
Djiboutian military, which also uses the existing airport,
would not be a problem because its fleet consists only of two
helicopters and two fixed wing aircraft. It could use the
new airport. Whoever took over the old airport should pay
for construction of the new one, Sulayem said. General
Helland advised Sulayem that it was highly unlikely anyone in
Washington would be convinced to pay for an entirely new
airport. Cost of construction, as well as the amount of
money that would be needed to bring the existing airport up
to standard would be prohibitive.

8. (C) Sulayem and Boreh put the cost of a new airport at
around USD 100 million. They then put forward a series of
alternative funding options, most of which were variations on
ascribing cost for the U.S. military's base lease in
Djibouti. Boreh's first idea was to allocate specific funds
from the cost of the base lease for construction of the new
airport, which would be carried out by DPI and the Government
of Djibouti. Sulayem topped that idea with a suggestion that
perhaps the base lease amount be waived altogether for a set
number of years in return for funding of construction of a
new airport. The final option the two presented was a
negotiated sale of the current airport to both the French and
U.S. militaries and the proceeds used to help build a new
airport. This could give the U.S. all the land on one side
of the runway and the French military all the land on the
other side of the runway, including the existing terminal
facility, Boreh suggested. Ambassador and General Helland
both expressed skepticism regarding the feasibility and
financial practicality of Sulayem's proposition and its

9. (C) Comment: We do not believe Sulayem and Boreh are in a
position at the moment to offer or negotiate any of the deals
they proposed in their meeting with Ambassador and CJTF-HOA
Commander. That said, they are to be taken seriously as
interlocutors, given their fiscal and investment influence in
Djibouti and their clout with President Guelleh. Also, Boreh
is an astute and serious businessman who is rarely deterred
from a project he has set out to accomplish. A new
international airport for Djibouti remains very much on his
radar. The existing airport, with its single runway, is
woefully inadequate for what he hopes to create for
Djibouti's future.

10. (C) Comment continued: The pair may, for the moment,
have the intention merely to plant ideas as the U.S. is in
the midst of negotiations to renew its lease of Camp
Lemonier. There is no doubt that if the U.S. ultimately saw
some value in the propositions-- or variants thereof --
Sulayem and Boreh could make it happen. However, there are
important residual issues such as concurrence of President
Guelleh, our relationship with the French, and implications
for French interests here, in whatever we choose to do.
There is also the nuts and bolts matter of cost and benefit
to the U.S., which must ultimately drive our stance in
Djibouti and which currently appears quite weak . End

11. (U) General Helland has cleared this message.