AMBASSADOR PRESENTS PRESIDENT GUELLEH WITH OFFER

C O N F I D E N T I A L DJIBOUTI 000528

SIPDIS

FOR AF/EX AND OBO; ALSO FOR AF AND AF/E

E.O. 12958: DECL: 04/12/2014
TAGS: PREL ABLD AMGT DJ
SUBJECT: AMBASSADOR PRESENTS PRESIDENT GUELLEH WITH OFFER
ON NEC

REF: A. (A) DJIBOUTI 492


B. (B) DJIBOUTI 340

Classified By: Classified by Ambassador Marguerita D. Ragsdale for reas
ons 1.4 (b) and (d).


1. (C) At her request, Ambassador met April 11 at the
Presidency with President Ismail Omar Guelleh to present
the USG's formal offer to purchase land for a new
Embassy compound site in the Salines Est section of
Djibouti. The Ambassador was accompanied by Pol/Econ
and GSO officers. (Notetakers) The Ambassador stated
that the U.S. had identified a site of approximately
40,300 square meters and would like to begin construction
as early as 2007. The U.S.'s offering price is USD
1,800,000 to include provision for land fill, installation
and delivery of utilities to the property, as well as all
incidental rights and easements associated with the
property. She also gave the President a site drawing of
the property in which the U.S. was interested and a
non-paper in both English and French of specific points
covering details of the offer, offer deadline, and U.S.
rights under the Vienna Convention regarding dues, taxes,
and fees directly related to purchase of property for a
diplomatic mission. (Note: Embassy passed the same
details via diplomatic note to Djibouti's Ministry of
Foreign Affairs on April 12. See septel.)


2. (C) Guelleh commented that he had heard rumors
"about town" that the United States was seeking a
suitable site and that it had hired a private firm to
survey sites and do measurements, and that the findings
had been compiled in a "thick book." (Note: Guelleh was
referring to the NEC Site Selection Report of August
2003 prepared by DTZ Leadenhall of South Africa. OBO
commissioned the report and contracted local architect
Daniel Dubois to do the survey. End Note.)


3. (C) Guelleh continued that the Government of Djibouti
had contracted an investor to develop the site containing
the tract the U.S. wishes to purchase. (Note: The
developer is Maya Trading and Real Estate Development
Company. See Reftels A and B. End Note.) The developer
would determine the price of the parcels, he said, after
the Government of Djibouti does its own assessment,
including the cost of utilities. Guelleh added that his
Government had not received from the U.S. any official
request for land at the time the contract with the
developer was signed. Ambassador asked that Guelleh
consider her meeting today with him, and the formal
diplomatic note to follow repeating the request, as the
U.S. government's formal offer to purchase. Guelleh
responded that he would be in agreement with allowing the
U.S. to have the parcel of land it is requesting if it
has not been granted to anyone else.


4. (C) Guelleh then turned to the price of the parcel.
He told the Ambassador he thought it was "arbitrary."
Per existing agreements regarding specifications and
cost of government owned land, he continued, there were
already buyers that had received land grants from the
government. The U.S. may now have to negotiate with
these beneficiaries. Ambassador interjected that the
U.S. understood that a portion (approximately 7,142
square meters) of the parcel in question had indeed
been sold, but that the U.S.'s interest was in the
remaining 40,300 square meters of the parcel.


5. (C) Guelleh commented that the Government generally
takes 1000 Djiboutian Francs (approximately USD 6) per
square meter in a land sale. Beyond that, the cost of
utilities and other land preparatory expenses, would be
added. He said that the U.S. offer equals roughly 5,000
Djiboutian Francs per square meter (approximately
USD 28),but at least 7,000 Djiboutian Francs per square
meter (approximately USD 39) would be needed to cover
roadways, networks and drainage. Ultimately, he said,
the developer would need to determine the final costs.
He stated that his Government would review the offer and
get back to the Ambassador with an assessment.
RAGSDALE