VZCZCXRO5701
OO RUEHROV
DE RUEHKH #0170/01 0390615
ZNR UUUUU ZZH
O 080615Z FEB 09
FM AMEMBASSY KHARTOUM
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2921
INFO RUCNIAD/IGAD COLLECTIVE
RUEHKU/AMEMBASSY KUWAIT 0006
RHMFISS/CJTF HOA

UNCLAS SECTION 01 OF 02 KHARTOUM 000170 
 
DEPT FOR AF A A/S CARTER, AF/SPG, AF/E 
ADDIS ABABA FOR USAU 
DEPT PLS PASS USAID FOR AFR/SUDAN 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EWWT EAID PGOV PREL SU KU
SUBJECT: KOSTI RIVER PORT SHOWS SIGNS OF PROGRESS, BUT DRY PORT LAYS 
IDLE 
 
REF: 07 KHARTOUM 1926 
 
¶1. (SBU) Summary: In a recent visit to the Nile-river city of Kosti, 
econoff observed progress on the ongoing refurbishment of Kosti's 
old but active river port, which is now in the hands of a private 
investment group from Kuwait. Port officials told econoff that the 
volume of goods transported from Kosti to the South (primarily 
foodstuffs and other commodities) increased over 30 percent in 2008, 
a trend they expect to continue even after the 2011 referendum on 
southern self-determination. The unrelated Kosti dry port, a 
logistics depot built by the state-owned Sea Ports Corporation to 
speed up the transport of goods from Port Sudan to the South, 
remains unutilized however. Officials claim it will become 
operational in March 2009. End Summary. 
 
¶2. (SBU) On January 26, econoff visited the Kosti River Port in 
White Nile State. A deal to privatize the port's operator, the River 
Transport Authority, was announced in late 2007 and has now been 
completed, according to port officials. The newly formed Nile 
Company for River Transport took ownership of Sudan's river ports in 
July 2008 and has been actively rehabilitating the facilities at 
Kosti, they said. (Note: The new company is 70% owned by the Aref 
Investment Group of Kuwait, 20% by the Government of National Unity, 
and 10% by the Government of South Sudan. End Note.) Econoff toured 
the new office buildings that have been constructed along the quay, 
which include a cafeteria and a computer training center. Port 
officials told econoff that they have signed a contract with an 
Egyptian firm to rehabilitate its entire fleet of barges, including 
17 push tugs (capacity of 2,000 metric tons each) as well as 
numerous smaller barges designed for carrying oil, dry goods, and 
passengers. Welders could be seen rehabilitating several dilapidated 
barges along the docks. 
 
¶3. (SBU) According to port officials, the Kosti River port is used 
primarily for transport of foodstuffs and other commodities - 
including cement, fuel and sugar - to South Sudan. In the port's 
shoddy warehouses, stacks of bottled water and sacks of grain could 
be seen, as well as basic household items such as plastic chairs and 
floor mats. Officials told econoff that the port possesses a land 
crane and a floating crane capable of lifting 35 and 25 metric tons 
at a time, respectively, but these are apparently only used for 
heavy equipment, as econoff witnessed scores of men carrying goods 
on their backs onto the barges destined for Malakal and Juba. Port 
officials stated that it takes approximately 20 days to cover the 
1435 kilometer distance from Kosti to Juba, a route which is 
navigable from July up until March, when it becomes impeded by 
shifting sands, shallow waters and exposed rocks. Waterweeds also 
can be problematic between Malakal and Juba, slowing down and 
damaging barge propellers, they said. 
 
¶4. (SBU) Port officials say that their business has reaped a 
dividend from the 2005 Comprehensive Peace Agreement and an 
additional boost from privatization: in 2008, over 87,000 metric 
tons of material was transported to the South, compared to 65,000 
metric tons in 2007. They believe they have the capacity to ship up 
to 115,000 metric tons per year to the south if there is sufficient 
demand. They fully expect the flow of commerce to continue in the 
event of a post 2011-secession. "The South cannot be developed 
without the flow of goods from the North. River transport is 
critical," said one. 
 
¶5. (SBU) Econoff also visited the Kosti Dry Port, a logistics depot 
built by the state-owned Sea Ports Corporation to speed up the 
transport of goods from Port Sudan to the South. It is envisioned 
that material with a final destination in the South will be 
transported to Kosti's dry Port for customs clearance, inspection 
and storage when the dry port becomes operational. The facility 
boasts an area of two million square meters with a warehouse 
capacity of 150,000 containers, as well as two reach stackers, four 
forklifts with 10-ton capacity, and a 50-ton capacity crane. 
Although the Dry Port project was launched in 2005, little progress 
appears to have been made since emboff last visited Kosti in 
December 2007 (reftel). The port remains completely devoid of cargo, 
and is staffed by only a few individuals idling in the vast 
warehouse offices.  Dry port officials declined to elaborate on the 
delay in the Port's operations, noting only that they were expected 
to commence in March 2009. 
 
¶7. (SBU) Comment: River transport can play a critical role in 
boosting the economy of southern Sudan, as air transport remains 
expensive and the road network is blocked during the long months of 
the summer rainy season.  Furthermore, not all roads are fully 
de-mined. There are still significant challenges to be overcome, but 
traditional North-South economic linkages such as Nile River 
transport ought to be encouraged and supported by donors to deepen 
 
KHARTOUM 00000170  002 OF 002 
 
 
the symbiotic relationship between North and South as we head toward 
the 2011 referendum. 
 
FERNANDEZ