By Ramatoulie Jawo
The Gambia Ports Authority (GPA) and the Ministry of Transport, Works, and Infrastructure appeared before the National Assembly’s Select Committee on Monitoring of Implementation of Government Infrastructure Projects on Tuesday to provide an update to them on the concession agreement between the government and Turkish company Albarak Group.
In his briefing to the committee, GPA Managing Director Ousman Jobarteh shared that the need for port infrastructure development was first identified in 2002, when a master plan was developed with the support of the African Development Bank (AfDB). A South Korean firm, Doha Consulting, won the contract to design the master plan for the Port of Banjul.
Jobarteh explained that the 2002 master plan revealed significant capacity constraints at the port and the urgent need for investment. Between 2002 and 2008, the government explored various funding options, with the AfDB acting as the main financier for three phases of port development projects. The initiative was revisited multiple times, with updates to the master plan in 2008, 2012, and 2016. Each revision was met with delays due to funding and the need for additional studies.
“That is the first, second and third Banjul projects; now this is what we call the fourth Banjul port project, and we started with that 2002 master plan, but with the rigors of the financing, the negotiations taking long and the studies that were needed to complete before we could access the funding took time and in 2008 another update was done and again in 2012, all because of a lack of funding. Now In 2016, with the advent of the new government, I think the initiative was again relaunched for the port to look at ways of improving the infrastructure, and at the time, Government decided that the basis of the decision was a 2002 study, updated in 2008 and again in 2012, maybe the decision factors may have changed, so the government decided that’s new study must be commissioned,” he explained.
Jobarteh pointed out that in 2017, a new master plan was commissioned, which was developed by Royal Haskoning from the Netherlands after winning an international tender.
He mentioned that the study was completed and submitted in 2018, and by July 2019, the cabinet had approved the master plan’s recommendations.
He also noted significant changes in the port and shipping landscape, stating that from Nouadhibou in Mauritania to Lobito in Angola, only the ports of Banjul and Bissau remain under public ownership and management.
“In November 2023, the board of directors of the Gambia port authority gave its decision that the PPP option can be invoked, and in November the government also, through a cabinet decision, informed the GPA through the Ministry of Works that the prayer of the board is endorsed for the GPA to explore the PPP option. That is how an international tender was launched in August 2022. When the tender was launched to invite international operators to bid for the concession based on the business model that was developed by the maritime Transport business services, after the expiry of the tender, ten international companies, including one Local firm, expressed interest in participating in the PPP process. These EOIs were reviewed, and eight were shortlisted and returned to go through the three evaluation criteria. One the technical proposal; two is the financial proposal; and three is the strategic commercial fit. Out of these eight, After evaluation, three were retained as the most responsive bidders: these are Red Sea Gateway Terminals of Saudi Arabia, Yilport of Turkey and Al- barak of Turkey,” he highlighted.
Mr. Jobarteh explained that the bidding document was designed to give bidders the opportunity to propose alternative submissions in addition to the developed business model.
He further stated that during the evaluation process, the cabinet, upon reviewing the evaluation report, discovered that one of the bidders, Al-Barak, had proposed an alternative solution along with their bid.”Because of the climate risk that Banjul is prone to and mentioned the results of a study, the government deems that with all the investment In Banjul 20 years down the line, these problems will still resurface. So the government continued with Albarak to request that they submit a commercial proposal by November 2023, which would guide the discussion on how to negotiate with them on this arrangement,” he said.
The government has requested Albarak to submit a commercial proposal by November 2023, which will serve as the foundation for discussions on negotiating their arrangement.
“And their advice was not to go into the contract immediately, but to have concession heads of terms negotiate. So in February, these concession heads of terms started, and the negotiations ensued on July 11, when the concession agreement was finally signed with Albarak. Now, the concession has two main elements. They will invest minimally in Banjul over a six-year period while the Sanyang port is being developed, so that’s the agreement with Albarak and the Government holds 20% equity in the business without putting any financial contribution they will invest,” he said.
He stated that Albarak plans to invest in improving the infrastructure in Banjul and will carry out the key components outlined in the master plan. The government will benefit from the gross revenue generated by their operations in Banjul.
“And the percentage of what is deemed to be the net profit whilst they are operating in Banjul will not be carried away by the investors, but it will be put in a reserve account on an escrow for investment, and when the Sanyang investment becomes due, the government will have to tap from those sources to invest in Sanyang and then the Sanyang project is also going through some conditions precedent whereby the investor is required to do detailed geotechnical investigation and engineering design to assess the structure that is going to be built in Sanyang,” he told the committee.
He mentioned that none of the fixed assets would be used by the investor as collateral for the project’s debt financing. On the HR side, all operational staff at the ports will be transferred to the new company.
“There is going to be job security; in fact, this was one of the non-negotiable instruments with which the investor is required to absorb the whole staff that are working within the operation and with the opportunity to create new employment with this investment in the inland Ports in Kaur and Basse. Also, the development of the shipyard. So it is a very elaborate process, and the highlights are that the government is not making any financial contribution. The investment bears all the financing risks, and what we get delivered is an improved infrastructure to open up the country to more competitiveness,” he said.
He informed the committee that the contract will become effective in January, but during the next six months, there will be a “conditions precedent” period where the investor must meet certain requirements before the contract is fully activated.
The chairman of the Select Committee requested the Master Plan, bidding process, and evaluation report documents from the Gambia Ports Authority.
MD Jobarteh also informed the committee that they began third-party engagements with stakeholders two months ago, starting with their own staff.
Ebrima Sillah, the Minister of Transport, Works, and Infrastructure, expressed his satisfaction with the project, highlighting that this investment is one of the largest foreign direct investments in The Gambia’s history.
“And it is all meant to enhance livelihood to support national development initiatives in the Gambia and to place the port of Banjul among the league of places that are now also enhanced in terms of infrastructure and also technical management visibility issues,” he said.