VZCZCXRO4194
PP RUEHDE RUEHJO RUEHLMC
DE RUEHDK #1276/01 1641641
ZNR UUUUU ZZH
P 131641Z JUN 07
FM AMEMBASSY DAKAR
TO RUEHC/SECSTATE WASHDC PRIORITY 8539
INFO RUEHLMC/MCC WASHDC PRIORITY
RHEHNSC/NSC WASHDC
RUEHAD/AMEMBASSY ABU DHABI 0039
RUEHSA/AMEMBASSY PRETORIA 2103
RUEHDE/AMCONSUL DUBAI 0004
RUEHTN/AMCONSUL CAPE TOWN 0074
RUEHJO/AMCONSUL JOHANNESBURG 0105

UNCLAS SECTION 01 OF 02 DAKAR 001276 
 
SIPDIS 
 
SIPDIS 
SENSITIVE 
 
STATE FOR AF/EPS, AF/W AND EBB/IFD/ODF - VBELON 
 
E.O.12958: N/A 
TAGS: EAID KMCA PREL ECON SG
SUBJECT: MCC TELLS GOS IT HAS ENDED SUPPORT OF ORIGINAL COMPACT 
PROPOSALS; OTHER PROJECTS ARE POSSIBLE 
 
 
¶1.  (U) Possible action request for the Department, Johannesburg and 
Cape Town in para 7. 
 
¶2.  (SBU) SUMMARY:  The MCC has informed President Wade and Prime 
Minister Macky Sall that it will not continue supporting Senegal's 
MCC Compact proposal, the Diamniadio Platform.  The MCC remains keen 
to work with Senegal on a compact to support the construction of the 
Dakar-Diamniadio toll road.  The GOS' private deal with Dubai-based 
Jafza International to develop a Special Economic Zone, with many of 
the same benefits as the Platform, has rendered the MCC project 
redundant since there is not enough economic demand for both 
projects.  We do not yet have President Wade's reaction, but Prime 
Minister Sall told MCC Vice President John Hewko and the Ambassador 
that the decision was "understandable."  We requested a response 
from the GOS within a week so that the MCC Compact does not become a 
major issue for a planned June 25-26 FLOTUS visit to Dakar.  Mr. 
Hewko offered to be available to President Wade to discuss this 
development further during the World Economic Forum June 13-15 in 
Cape Town, South Africa.  The MCC's decision could impact Senegal's 
anticipated government reshuffle, and also Karim Wade, the dealmaker 
for the Jafza project.  END SUMMARY. 
 
THE BAD NEWS . . . 
------------------- 
¶3.  (SBU) On June 11, MCC Vice President for Operations John Hewko 
told Senegalese Prime Minister Macky Sall that Senegal's Compact 
proposal, the construction of a major industrial platform at 
Diamniadio, will no longer be considered for MCC funding since 
Senegal has found a private partner to invest in a similar project. 
Concurrently, the Embassy delivered a letter to President Wade from 
MCC CEO John Danilovich providing the MCC's decision.  Mr. Hewko 
confirmed that the MCC still hopes to sign a compact with Senegal in 
FY08, and is committed to proceeding with due diligence for joining 
other donors in funding the Dakar-Diamnidio toll road, whose 
construction has already begun.  In explaining why the MCC has ended 
its work on the Diamniadio Platform proposal, Hewko (who was 
accompanied by the Ambassador, MCC Managing Director for Africa 
Jonathan Bloom, and Econ Counselor) made the following points: 
 
-- The MCC has learned that the GOS is working with Dubai-based 
Jafza International to build a Special Economic Zone (SEZ) in the 
area of the Platform and the planned new airport at Diass; 
 
-- Senegal is to be congratulated for attracting a private investor 
for a project of this magnitude; 
 
-- It is clear that there is not enough demand for two Special 
Economic Zones in Senegal, and it would not make sense to build 
Diamniadio and the SEZ; 
 
-- It is preferable to have a project of this kind financed by the 
private sector; 
 
-- Therefore, the MCC has ended its work in pursuit of this 
Diamniadio Platform; 
 
-- This decision was made after extensive review, consultation, and 
consensus with senior officials at the State Department and the 
NSC; 
 
-- This decision does not reflect a lack of diligence or competence 
on the part of Senegal's implementing agency for the Platform, the 
AMPMD. 
 
¶4.  (SBU) Hewko also noted that in addition to pursuing the toll 
road, the MCC would be willing to consider other proposals from 
Senegal, but that in order to move quickly to completion of an 
initial Compact, it might be best to just focus on that project and 
consider other proposals in the future after the completion of the 
toll road. 
 
. . . TAKEN WELL - SO FAR 
------------------------- 
¶5.  (SBU) Prime Minister Sall appeared not to be surprised by the 
MCC's decision, and it is likely that the Director General of AMPMD, 
Sogue Diarisso, had highlighted for the Prime Minister that there 
was not enough economic demand for both industrial platforms, and 
that the two projects could not be merged due to the MCC's 
requirements for transparency and open competition for contracts. 
Sall stated that he "understood" the MCC's decision, and was pleased 
that the MCC could join the World Bank, the French Development 
Agency (AFD), the Islamic Development Bank, and a too-be-determined 
 
DAKAR 00001276  002 OF 002 
 
 
private partner in the construction of the much-needed toll road. 
In explaining why the Government had concurrently pursued both 
industrial platform projects, Sall said the GOS was allowing both to 
move forward on their own as a type of "competition" to see which 
one would best serve the country. 
 
¶6.  (SBU) As of this writing, we have not received any feedback on 
the Danilovich letter to President Wade.  Sall undertook to assure 
that Danilovich's letter was received by President Wade, who was 
still in Europe following the G-8 Summit, and who was planning to 
head next to the World Economic Forum, June 13-15, in Cape Town, 
South Africa. 
 
¶7.  (SBU) Possible action for the Department, Pretoria and Cape 
Town:  Mr. Hewko noted that he will also be attending the World 
Economic Forum and offered to make himself available for a meeting 
with President Wade if requested to clarify the MCC decision.  MCC, 
via the Department, may request a note taker and other assistance 
organizing such a meeting. 
 
NEXT STEPS 
---------- 
¶8.  (SBU) Hewko requested an initial response to the MCC decision on 
the platform and the interest in pursuing a Compact on the toll road 
within one week.  The quick response is important to avoid having 
Senegal's MCC program become an overriding issue during a planned 
June 25-26 FLOTUS visit to Dakar.  A quick response would also 
permit the MCC to go ahead with a planned mid-July mission to 
Senegal to begin due diligence work on the toll road proposal.  In 
the meeting on the PM's side was Aminata Niane, the Director General 
of Senegal's investment promotion agency (APIX), which is also the 
overall project manager for the toll road. 
 
¶9.  (SBU) The MCC's Jonathan Bloom also noted the MCC has produced a 
tremendous quantity of detailed analysis of the issues that could 
affect the populations in the project area, and all of this analysis 
is the property of the Government.  Bloom recommended to the PM and 
his team, including Diarisso and Niane, that the Government or Jafza 
make use of this valuable resource in the development of its Special 
Economic Zone. 
 
COMMENT 
------- 
¶10.  (SBU) The timing of the delivery for the MCC's message was not 
ideal because President Wade is planning a major cabinet shuffle in 
the coming days or weeks.  PM Sall will most likely be replaced. 
The President's reaction may be predicated, in part, on where he 
believes the Diamniadio Platform fits into his economic development 
plans for the coming years.  One person who will perhaps be impacted 
by the MCC decision is Wade's son, Karim Wade, who was by all 
accounts the key player in securing the Jafza deal.  If that deal 
included promises of MCC resources or infrastructure development, 
Karim could have some explaining to do. 
 
¶11.  (SBU) It will also be instructive to learn what happens to the 
AMPMD and Diarisso.  After many false starts, AMPMD in recent months 
has become a very effective partner to the MCC, and is now arguably 
Senegal's most advanced organization for managing major 
infrastructure projects.  Mr. Hewko highlighted to the Prime 
Minister the MCC's high regard for Diarisso and his staff, and it 
would be a loss for Senegal if it did not take full advantage of 
this organizational resource in pursuing other major projects.  END 
COMMENT. 
 
¶12.  (SBU) Visit Embassy Dakar's SIPRNET Web site at 
http://www.state.sgov.gov/p/af/dakar. 
 
Jacobs