DJIBOUTI: SECOND SITE VISIT ADVANCES MEGAPORTS INITIATIVE

UNCLAS DJIBOUTI 000453 SENSITIVE SIPDIS DEPARTMENT FOR AF/E AND E/EEB C O R R E C T E D C O P Y (ROUTING INDICATOR) E.O. 12958: N/A TAGS: PGOV PINS KNNP EWWT ETRD ECON ENRG DJ ET SUBJECT: DJIBOUTI: SECOND SITE VISIT ADVANCES MEGAPORTS INITIATIVE REF: 09 DJIBOUTI 137; 08 DJIBOUTI 925 ¶1. (SBU) SUMMARY. With strong GODJ support, the U.S. Department of Energy is proceeding with implementation of a USD 6-10 million "Megaports" program to enhance security at Djibouti's Doraleh Container Terminal. The opening of this world-class port facility in December has already produced rapid growth in container traffic through Djibouti, with an increase of 40 percent from first quarter 2008 to first quarter 2009. END SUMMARY. ¶2. (SBU) In December 2008, Djibouti became the first African country to sign a Memorandum of Understanding (MOU) with the Department of Energy (DOE) to participate in the "Megaports" program, which aims to detect and deter the transport of special nuclear material (reftels). In Djibouti, the Megaports program will be implemented at the brand-new Doraleh Container Terminal (DCT),managed by Dubai Ports World (DP World). During their second site visit to Djibouti since the signature of the MOU, the DOE's Djibouti Megaports team and EmbOffs met with stakeholders from the GODJ and DP World, and reached preliminary agreement on the placement of Megaports equipment within the port. The total estimated cost of the Djibouti Megaports program is USD 6-10 million. ¶3. (SBU) During the April 26-30 trip, EmbOffs and the DOE Megaports team met with Minister of Transport Ali Hassan Bahdon, who expressed continued strong support for the initiative. The Minister of Transport, along with the Minister of Foreign Affairs, co-signed the Megaports MOU on behalf of the GODJ. In working-level meetings with a GODJ inter-agency Megaports Contact Group appointed by Minister Bahdon, the DOE Megaports team reviewed the program and implementation time line. The Contact Group, Megaports Team, and DP World officials also reached tentative agreement on the placement of the Megaports equipment at the DCT, pending technical reviews and final Ministerial-level approval. Other issues discussed included the possibility of establishing a formal Response Protocol between the USG and the GODJ to outline USG support measures in case the Djibouti Megaports Program detects actual special nuclear material. In early May, a group of fifteen GODJ and DP World representatives will travel to a Megaports training facility in Washington State to gain further familiarity with the equipment and the program. The DOE team will return to Djibouti in mid-July to finalize equipment placement and allow the three potential U.S. contracting companies to view the site before preparing bids. ¶4. (SBU) DP World officials have strongly supported the Megaports Initiative, which they view as further bolstering the DCT's reputation as a world-class facility. DP World officials have been pleased with the initial success of the USD 300 million DCT, which was formally inaugurated in February. Despite the global financial crisis, several DP World officials told Ambassador that year-over-year container traffic was up 40 percent in the first quarter. Somali piracy did not appear to have a discernible dampening effect on traffic. In addition, transshipment business is up, and GODJ and DP World officials hope to see transshipment comprising 35 percent of container traffic by year's end. In recent years, transshipment has hovered at closer to 15-20 percent of total business. Several GODJ officials have told EmbOffs that Djibouti hopes rising transshipment business will continue to offset any reduction in import business linked to a slowdown in Ethiopia's economy. SWAN