POLITICS AND POLLUTION -- UPDATE ON THE IRAQI PORT

C O N F I D E N T I A L SECTION 01 OF 02 BASRAH 000129 SIPDIS SIPDIS E.O. 12958: DECL: 8/3/2016 TAGS: ECON ETRD IZ ZP SUBJECT: POLITICS AND POLLUTION -- UPDATE ON THE IRAQI PORT AUTHORITY REF: (A) 05 BASRAH 125 (B) BASRAH 024 BASRAH 00000129 001.2 OF 002 CLASSIFIED BY: Mark Marrano, Deputy Regional Coordinator, REO Basrah, DOS. REASON: 1.4 (b) ¶1. (C) Summary. On August 2, the assistant to the director general of the Iraqi Port Authority (IPA),Captain Hussein Mohammed Abdullah, met with the Deputy Regional Coordinator (DRC) to discuss issues regarding the Iraqi Port Authority. Hussein described the permeation of politics in the IPA and his particuQr situation. He also provided information about an oil spill that is polluting the Khor az Zubayr Port and offered his views on an Iraqi attempt to collect retroactive tariffs on oil exports since 2004. End Summary. ¶2. (C) Hussein reported that he had been replaced as the IPA director general by Captain Salah Khuday'r Abbod, a member of the Office of the Martyr Sadr (OMS),headed by Shia militia chief Moqtada al-Sadr. Hussein, who is not affiliated with any political party, said his demotion to the second highest position in the IPA was the outcome of a feud between the former Minister of Transportation and himself. Hussein bemoaned the permeation of politics in the IPA, which accounts for the second largest source of revenue in Iraq after the oil exports (see ref B). In his new position as assistant to the IPA Director General, Hussein indicated that he manages the daily operation of the Umm Qasr Port, Iraq's largest, and oversees a comprehensive port modernization project funded by a $300 million Japanese loan. For his part, the new director general focuses his attention on the nearby Khor az Zubayr (KAZ) Port, according to Hussein. ¶3. (C) Hussein criticized the political process in which political parties try to place their loyalists in sensitive economic positions for which they lack the education and experience to handle. He voiced support for Prime Minister al-Maliki's efforts to put competent people in such positions and downplay their political affiliations. Hussein declared that, under his direction, Umm Qasr Port increased its revenues tenfold in 2005 compared to 2004, which explains why he has kept a senior position in the IPA. The Captain said that he was able to increase the port revenues by collecting unpaid fees for the use of port terminals. He said he expects port revenues in 2006 to remain at roughly the same level as in 2005, when they reached 139 billion Iraqi dinars (US$95 million). ¶4. (C) Hussein gave a report on the oil slick caused by the recent collision between a tanker carrying 7000 tons of heavy oil and a sunken ship, Palestine, in the Shatt al-Arab waterway. With the hull of the tanker pierced and discharging oil, the captain tried unsuccessfully to beach the tanker. As the tide ebbed, the currents pulled the vessel into the middle of the channel where it sank to the bottom, spewing oil and leaving only its mast above the water's surface. The ownership of the sunken tanker is unknown, having variously been reported to have Sri Lankan or South African registration, but without identifying documentation in any international shipping registry, according to Hussein. He assumed that Dubai was the intended destination of the ill-fated tanker. Hussein reported that a private firm based in Bahrain, the Marine Emergency Mutual Aid Center (MEMAC) has dispatched a small tanker to collect the salvageable oil and anti-pollution teams to clean up the spilled oil for the price of $2 million. He said that oil has washed up onto the shore but, in his opinion, has not caused an ecological disaster to wildlife. Hussein requested assistance from the United States in the form of one or two oil containment packages, each costing $60,000. He expressed fear that the leaking tanker could burst, which would have catastrophic consequences for the port. ¶5. (C) Regarding a pending law suit brought by the IPA against Norton Lily International to try to collect duties on oil exports retroactive to 2004, Hussein indicated that he deals with ships, not oil companies, and that this matter concerns the KAZ port, which Salah is in charge of. Offering comments as an outside observer, he expressed the view that this is a contractual matter that should concern Iraq's State Owned Marketing Organization (SOMO),not the foreign companies acting as agents for Iraq's oil exports. He indicated that Norton Lily and similar firms normally would be responsible for port charges only. ¶6. (C) Comment. Captain Hussein's demise as IPA Director General is a fate that has befallen many educated Iraqis who have not allied themselves with political parties to secure their personal futures. In Hussein's case, he did not fall far down the employment ladder because his skills as an expert port manager could not be sacrificed to political expediency. Many others of Basrah's educated middle class have been much less BASRAH 00000129 002.2 OF 002 fortunate, having had to flee their city and country to preserve their lives. End Comment. MARRANO