Painting by Cheri Samba

Lokuta eyaka na ascenseur, kasi vérité eyei na escalier mpe ekomi. Lies come up in the elevator; the truth takes the stairs but gets here eventually. - Koffi Olomide

Ésthetique eboma vélo. Aesthetics will kill a bicycle. - Felix Wazekwa

Wednesday, February 24, 2010

Chinque Chantiers: Hiccups in the China-Congo deal

There was a good article in the Africa-Asia Confidential newsletter last week on the Congo-China deal. (You can read it for free here). According to a parliamentary commission, some $23 million of the $350 million in signing bonuses have gone missing.

"
Commission President and ruling party member Modeste Bahati Lukwebo criticised the collusion of some senior officials in Gécamines with 'local justice officials in Lubumbashi '. This complicity 'facilitated the loss of $23,722,036 of the $50 mn. intended for Gécamines,' claimed the report, signed by five deputies of the Assembly.

The $50 mn. is just a part of the $350 mn. entry fee that the Chinese consortium agreed to pay for signing the $6 bn. ore-for-infrastructure joint venture deal which was concluded on 22 April 2008 by Minister of State for Infrastructure Pierre Lumbi Okongo, China Railway's Li Changjin and Sinohydro's Fan Jixiang.

The deal gave the Chinese companies access to mining concessions which hold 10.6 mn. tonnes of copper and 626,000 tonnes of cobalt, which are currently estimated to be worth $100 billion, in exchange for the construction of railways, roads, schools and hospitals. The Chinese consortium added a new partner in July 2008, giving China Metallurgical Group a 20% stake."

The report also talks about other hiccups in the deal:

  • "The biofuels project involving the Chinese telecommunications company ZTE has stalled. In 2007, when the Memorandum of Understanding between ZTE and Congo 's Ministry of Agriculture, Fisheries and Livestock farming was signed, it was estimated that the biofuels project, worth $1 bn., would require 3 mn. hectares of oil palm plantations in Equateur, Bandundu, Orientale and Kasai-Occidental provinces. In 2008, 250 hectares of fertile land were offered to ZTE. The Agriculture Minister has twice received delegations from ZTE to discuss this. The last time was in March 2009, but three years after the MOU nothing has been done and according to the Ministry of Agriculture 'nobody talks about it anymore'."
  • "...talks were underway in 2009 with the China Development Bank and Sinosure to finance four universities and the renovation of N'Djili airport, as well as the road leading there, in Kinshasa . The contractor was supposed to be Changda Highway Engineering Corporation. None of these projects had materialised because the CDB did not accept the concessions offered to them in Potopoto in Katanga and had pulled out of talks in late 2009. The CDB was the financier behind Sinosure, so the deal involving the latter also fell through.


2 comments:

james said...

Hi Jason,

Did you read the article in the Financial Times on an American vulture fund which won a trial in Hongkong and which more or less got a claim on Congolese debts: http://www.ft.com/cms/s/0/3773355c-20e5-11df-b920-00144feab49a.html
Much too complicated for me as I am not a lawyer. I do have the feeling though it could be an important ruling.
Cheers
Roger

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