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

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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

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fortunate, having had to flee their city and country to preserve
their lives. End Comment.
MARRANO