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Sudan Uncertainties
SUDAN PROJECT UNCERTAINTIES
A new port project has been announced for Sudan but there are reasons to believe this project is not built on strong foundations. Mike Mundy puts the project under the microscope
Almost as soon as the announcement was made, in the second half of June, that Abu Dhabi Ports Company (AD Ports) was to partner with DAL, Sudan’s largest private company, to build a new Red Sea port, 200km north of the existing port complex in Port Sudan it was followed by a statement to the Abu Dhabi Securities Exchange, by AD Ports, noting that it has not yet signed any agreements to build a port in Sudan. The statement further noted: “We confi rm to you that the Company will make the appropriate disclosures should there be new projects or investments in accordance with the market’s applicable regulations.”
The story was originally released to Reuters by Osma Daoud Abdellatif, Chairman, DAL, who highlighted the US$4 billion new port project as part of a US$6 billion investment package which will also include a free trade zone and a large agricultural project. He additionally explained that the project was originally signed under the civilian-led transitional government which came to power after the country’s former president, Omar al-Bashir, was forced from power in 2019. Further, the agreement, explains Osma Daoud Abdellatif, has been “rubber stamped” by Sudan’s current military leadership which assumed power by means of a coup in 2021, overthrowing the civilian-led government. Reportedly the parameters of the deal were agreed between General Abdelfattah al-Burhan and UAE President Sheikh Mohamed bin Zayed at a meeting in the UAE.
Clearly, the two joint venture partners were not ‘in sync’ regarding the timing of the release of news concerning the project. It appears DAL may have jumped the gun and particularly from the standpoint of the requirements of the Abu Dhabi Securities Exchange. Equally, there are other important considerations in this respect.
Sudan is not stable in either a political or economic context. There has been strong international condemnation of the military coup and the military leadership’s ongoing residency as the governing political body. There is also strong resistance to this in the civilian population and with no other foreign direct investment deals taking place since the military took power there are serious concerns regarding the wisdom of making large scale investments under the umbrella of the current leadership. All the more so as the military leadership is reported by agencies such as the UN Security Council to be continuing to violently repress ongoing protests against the coup.
Fundamentally, there is concern that if a solution is not found to restore a civilian-led government then with tensions among Sudan’s different security forces rising the country could descend into conflict and divisions of the type witnessed in Libya and Yemen.
As Volker Perthes, U.N. Envoy for Sudan, recently told the U.N. Security Council: “…the stakes are high and the aspirations of the Sudanese people for a prosperous, civilian-led, democratic future are at risk. Unless the current trajectory is corrected, the country will head towards an economic and security collapse and significant humanitarian suffering,” he underlined.
Hardly ideal conditions for a multi-billion dollar investment – especially with the deal requiring an upfront payment of US$300 million to Sudan’s Central Bank.
OTHER CONSIDERATIONS
These are not the only considerations. It is understood that the Government of Sudan still has certain issues that remain to be resolved with International Container Terminal Services Inc. (ICTSI) regarding the concession awarded to it for container and conventional cargo handling operations at the port of Sudan, the country’s existing main port. The concession was awarded following an international tender, overseen by Hamburg Port Consulting, under the Omar al-Bashir regime, with ICTSI was compelled to withdraw in the unstable situation that ensued following his removal from power. In effect, it is believed that with unsolved issues remaining between the two parties the legitimately awarded concession is still in force inclusive of key features such as an exclusivity clause.
Yet another influential factor that does not augur well for the prospects of the new port project!
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