VZCZCXYZ0030
PP RUEHWEB

DE RUEHKH #1926 3391355
ZNR UUUUU ZZH
P 051355Z DEC 07
FM AMEMBASSY KHARTOUM
TO SECSTATE WASHDC PRIORITY 9453

UNCLAS KHARTOUM 001926 
 
SIPDIS 
 
DEPT FOR AF/SPG, AF/EPS, EB/IFD, AND EB/ESC 
DEPT PLS PASS USAID FOR AFR, AND ALSO PASS USAID 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958:  N/A 
TAGS: PREL PGOV EFIN ECON EAID SU
SUBJECT: KOSTI'S NEW IDLE PORT INDICATIVE OF CPA DELAYS 
 
¶1. (U) SUMMARY: In a December 4 visit to the city of Kosti, the "the 
river gateway to the south," emboffs visited the city's new port 
that remains unutilized due to Sudanese bureaucratic in-fighting. 
Motivated by the signing of the Comprehensive Peace Agreement, the 
Sudan Sea Ports Corporation (SPC) began work on a new port late in 
2005 to speed the transport of goods from Port Sudan to the South 
and ultimately support economic development in the South.  Local 
officials stated that a dispute between Port Sudan and Kosti 
officials over port fee revenues has left the port completely empty 
for over a year since its completion and eleven months since its 
formal opening by Vice-President Ali Osman Mohamed Taha. END 
SUMMARY. 
 
¶2. (U) In 2005 the SPC began work on a new dry dock and river port 
in Kosti to facilitate customs clearance procedures and alleviate 
congestion in Port Sudan.  Local officials from White Nile State's 
Ministry of Investment and the Economy told emboffs that the idea of 
the project came from the CPA's mandate to support economic growth 
in the south (as mandated by the wealth sharing protocol, 1.7-1.9.). 
 Material with a final destination in the South should be 
transported directly to Kosti's dry port for customs clearance, 
inspection, and storage.  Thus a new river port with space for four 
large barges was created adjacent to the dry port to speed 
transportation of goods to the south.  Officials claimed that for an 
introductory period, port fees would be reduced by 50% by using this 
new facility. 
 
¶3. (U) The dry port has an area of 2 million square meters with a 
warehouse capacity for 150,000 containers in three warehouses (one 
of 4000 square meters and two others of 1000 square meters).  Two 
reach stackers, four fork lifts with 10-ton capacity, and a 50 ton 
crane were also purchased for the dry port site.  Despite the port 
not yet being operational, approximately 6 customs officials and ten 
other employees of the dry port sat in empty offices during the site 
visit. 
 
¶4. (U) Local officials from the Investment Committee of White Nile 
State stated that "political problems" prevented the start of the 
dry dock's operations.  Although they also emphasized that technical 
difficulties with the communication system also prevented 
operations, the General Director of the Resources Committee of White 
Nile State, Khaidar Daoud Muhammad Touam, later told emboffs that 
the real reason for its delay in operations is due to an ongoing 
quarrel between Port Sudan and Kosti officials in the Sea Ports 
Corporation.  (Note:  The Sea Ports Corporation is an independent 
authorized body acting on behalf of the central Government and 
holding the responsibility of operating and managing Sudan's ports. 
End Note.)  According to Touam, the former managing director of SPC 
started the Kosti project, but was soon replaced by a native of Port 
Sudan, Ibrahim El-Amin Ahmed, after the signing of the Eastern Sudan 
Peace Agreement.  According to Touam, Ahmed realizes that Kosti's 
port will result in lost revenue to his home town and state and 
therefore he has intentionally delayed its operations.  Touam said 
that he will travel to Port Sudan next week to lobby Ahmed and the 
executive board of SPC, but that he expects that he and other 
officials from White Nile State will have to raise the issue with 
higher levels at the Ministry of Transportation. 
 
¶5. (U) In a separate visit to Kosti's old and active port, the 
director of the River Transport Company, Ismail Mahmoud Ismail, 
expressed his disappointment that the South continues to import 
material through Kenya and Uganda, rather than through Port Sudan. 
Ismail did, however, acknowledge that his business has reaped a 
peace dividend from the CPA, expanding its fleet of tow boats from 7 
in 2004 to 13 in 2007, and currently constructing 46 additional 
barges.  Ismail stated that transportation through Port Sudan should 
be more efficient and cost-effective than going through Kenya and 
Uganda, but claimed that the Government of South Sudan imports 
material from Kenya and Uganda so that it can bypass customs fees 
and import items that would otherwise be illegal in the north such 
as alcohol. 
 
¶6. (SBU) COMMENT: Considering the failure that it represents, it was 
surprising that White Nile officials chose to showcase their empty 
new port.  Although inspired by the CPA and intended to spark 
economic development in the South, this multi-million dollar project 
appears to have only benefited the north:  the northern-based SPC 
awarded contracts and expanded business relationships through its 
construction; it employed workers almost entirely from the north 
during construction; and the tax revenues from its operation will 
only go to White Nile State and the Government of National Unity. 
More importantly, Kosti's new port exemplifies much of what has gone 
wrong with economic development aspects of the CPA where greed, 
bureaucratic delay, and exploitation have left elements of the 
landmark agreement utterly vacant. END COMMENT. 
 
FERNANDEZ