Addis Ababa, June 20, 2006 – Negotiations between MIDROC Group and Somaliland over the management concession of the Port of Berbera have collapsed, after authorities in the republic rejected the proposal, reliable sources disclosed.  

Talks between MIDROC and Somaliland officials began two months ago, spurred on by the Ethiopian government’s October 2005 decision to recognize the Port of Berbera as an alternative to the Port of Djibouti. The two parties had signed a memorandum of understanding in November 2005.   Subsequently, MIDROC experts traveled to the Port, 964Km east of Addis Ababa, to prepare the terms of agreement. They had submitted a proposal to Somaliland’s Ministry of Finances.

The proposal was wide ranging, according to sources. It stated contract terms, how much MIDROC would be making from handling the management, the duration of the contract and the investment required to improve the port to an international standard. At present, the Port of Berbera is not able to harbor large commercial vessels and only has room for six smaller ships at a time, said Ethiopian maritime experts.  

The proposal never made it further. Although MIDROC representatives always believed an agreement would be reached, the Ministry in Somaliland turned down the submitted terms without elaboration.  

However, sources at the Ministry of Finance told Fortune that Somaliland officials became concerned that MIDROC was more focused on its business than developing the Port for the long term.

Ali Omer, general manager of the Port of Berbera, told Fortune that Somaliland does not believe the proposal that was presented by MIDROC did cater to its national interests.  

“Hopefully, the Group will come back with a better proposal that will benefit everyone,” he said.

Neither Ali nor officials at the Minster of Finance were willing to disclose what in the proposal conflicted with the national interests of Somaliland. Management Service, a MIDROC subsidiary handling the negotiations, was unable to provide further information either.  

Although the decision to use the Port of Berbera was passed some time ago, activity has been slow. Only a few containers brought by the Ethiopian Electric Power Corporation (EEPCo) and 10 used cars destined for private individuals in Dire Dawa have come through it so far. The goods passed through the Port six months ago, and no other cargo has arrived since then.    

By ISSAYAS MEKURIA, FORTUNE STAFF WRITER

Source: Addis Ababa Fortune

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