ADEN PORT: YEMEN MISSES ANOTHER OPPORTUNITY

C O N F I D E N T I A L SANAA 000106

SIPDIS

E.O. 12958: DECL: 01/12/2015
TAGS: ECON ETRD KCOR YM ECON COM
SUBJECT: ADEN PORT: YEMEN MISSES ANOTHER OPPORTUNITY


Classified By: DCM Nabeel Khoury for reasons 1.4 (b. and d.)


1. (SBU) In a briefing to donors on January 10, Deputy Prime
Minister and Minister of Planning and International
Cooperation Ahmed Sofan announced that Prime Minister Ba
Jammal "in the interest of promoting the widest competition"
rejected the Rotterdam Management Group's (RMG)
recommendation to short-list three companies (believed to be
Maersk, Hutchison-Whampoa and Dubai Ports International) and
let all nine companies compete for the Aden Port Tender.
Sofan touched on concerns raised by the USG and World Bank
regarding the integrity of the process, but assured donors
that "high international" standards would be met.


2. (SBU) Sofan said that RMG produced two lists of
short-listed companies a group of three and a group of six.
Ba Jammal chose to override the RMG decision and placed the
due date for the 9 bids on February 16. In a nod to
credibility concerns, Sofan offered to open up the process to
international monitoring.


3. (C) Deputy Foreign Minister Mustafa Noman indicated to
Pol/Econ Deputy on January 8 that a "compromise" would likely
occur allowing the existing operator OPM (with heavy Yemeni
interests) to stay in the running. Noman also noted concerns
in Sanaa over the viability of the Dubai International Port
offer, saying that many believe the offer to be from
"investors in Dubai," but not the same company as Dubai Ports
International. (Note: This is not the case.) Former
Parliamentarian Saad Talib confirmed on January 10 that OPM
does have ties to PM Ba Jammal and reiterated long-standing
concerns over OPM's viability.

4. (C) Comment: While there is still a chance that Yemen will
award the tender to Dubai Ports International, Maersk or
Hutchison-Whampoa, the fact that rumors are spreading about
Dubai, and that Ba Jammal is making his case on "fairness,"
leads post to suspect the deal will go to the existing
operator OPM. We will continue to advocate at the highest
levels and coordinate with the donor community to ensure that
international standards are maintained. Sofan's announcement
came the same week Ba Jammal characterized himself as a
"crusader against corruption." Given the rejection of the
short-list, and the lack of the credibility in Ba Jammal's
promises, the government's commitment to bring in
international investors is yet again in question.
KRAJESKI