By Amin Kef (Ranger)
It is an open secret that it is economically unethical for the automatic termination of an existing contract agreement with another party for no justifiable reason even before the commencement of the implementation of the contract in question by the party whose contract is to be aborted. This particularly holds true in a situation where one of the parties in the contractual agreement has not in any way breached any aspect of the contract. Obviously, if indeed such a bad practice is pursued, definitely it will negatively impinge on donor confidence.
Contextually put, if rumours making the rounds is something to believe in, that the Government of Sierra Leone is on the verge of negotiating a new contract with Kingho Railway and Port Company Limited for the handling of the Pepel Railway and Port when it has an existing contract with ARISE IIP, then such could not be deemed as an ethically economic decision on the part of the Government. At this crucial moment when the Government is desperately trying to woo potential investors into the country, the spontaneous termination of a contract with a credible donor will send the wrong signals to other investors that are contemplating on investing huge sums of monies into a particular project.
For now it must be noted that the Government of Sierra Leone is under intense scrutiny as concerns mount over its handling of the lease agreement pertaining to the Pepel Railway and Port which has garnered widespread attention due to its potential impact on investor confidence and existing contracts.
Originally transformed by African Minerals Limited with financial support from China Exim Bank and Standard Bank of South Africa, the Pepel Railway and Port project represented a staggering $1.2 billion investment. Executed under the Build, Operate, and Transfer (BOT) framework, this ambitious endeavor breathed new life into the former Marampa mining railway and port facilities.
After a two-decade-long operation, the assets were handed over to the Sierra Leonean Government in 2020, making them 100% government-owned. However, in 2021, the Government decided to lease these assets to Kingho Railway and Port Company Limited. Unexpectedly, just two years later, on January 10, 2023, the government terminated its lease agreement with Kingho Railway and Port Company Limited.
Critics have voiced their concerns over the significantly below-market-value fixed annual lease rent of $1,250,000 that Kingho was paying before the lease termination.
Amid the ongoing negotiations for a new 20-year agreement with Kingho, it has emerged that the proposed annual lease rent stands at only $1.5 million. This figure has been met with dissatisfaction, particularly following the abrupt termination of Kingho’s previous lease agreement in January 2023.
Currently, the only legally binding agreement in effect is the one between the Government of Sierra Leone and ARISE IIP, which pertains to the management of the Pepel Port and Railway. In light of this, some voices have called for a temporary pause in the ongoing negotiations with Kingho until the matter of the existing lease agreement with ARISE IIP is fully addressed.
The unilateral cancellation of signed contracts or agreements has raised concerns about potential damage to investor confidence and the Government’s credibility. ARISE IIP maintains a valid agreement with the Sierra Leonean government, endorsed by the Cabinet, to develop, expand, and manage the Pepel Railway and Port, which has not been terminated by the government.
In light of these concerns, the Government of Sierra Leone is urged to proceed cautiously in its negotiations for a new lease agreement with Kingho regarding the management of the Pepel Railway and Port.
Presently, the only valid agreement for the management of the Pepel Railway and Port is the one signed between the Government of Sierra Leone and ARISE IIP.
In a significant development for Sierra Leone’s transportation sector, ARISE IIP has announced the impending arrival of seven passenger railcars, imported from Japan. According to correspondence dated September 22, 2023, from Samuel Komba Kambo, General Manager of Interface at ARISE IIP, to Amb. Alhaji Fanday Turay, the Minister of Transport and Aviation, these railcars are expected to dock at Freetown Port on October 26, 2023.
The correspondence titled “Arrival of Passenger Trains” and bearing the reference number ARISESL/0923/02 highlights the progress made under the Railway and Port Lease Agreement signed between the Government of Sierra Leone (GoSL) and ARISE IIP on January 17, 2023. This agreement grants ARISE IIP the responsibility to operate and maintain the rail and port infrastructure, including the operation of a passenger rail service.
In the letter, General Manager Samuel Komba Kambo stated, “ARISE IIP has successfully procured and shipped seven passenger railcars and their associated critical spares from Japan, with an anticipated arrival at Freetown Port on October 26, 2023.” He further explained that ARISE IIP is diligently preparing for the reception of these railcars, including the mobilization of necessary equipment to safely unload, transport, and park them along the rail infrastructure.
The letter mentions the current control of the rail infrastructure by Kingho, prompting ARISE IIP to seek permission from the government to park the railcars along the rail corridor until the commencement of passenger rail services. The letter also includes detailed information, such as a packing list of the railcars with their respective weights and dimensions, as well as a list of critical spares.
General Manager Samuel Komba Kambo concluded the letter by expressing ARISE IIP’s intention to submit duty-free entry forms for the shipment in the coming week, in accordance with the provisions of the agreement. The duty-free waiver is a key element in facilitating the successful implementation of the passenger rail service.
Copies of the letter have been sent to several high-ranking officials and ministries, including the Honourable Chief Minister, the Honourable Minister of Mines and Mineral Resources, the Honourable Minister of Finance and Economic Development, the Honourable Attorney General and Minister of Justice, the Secretary to the President, and the Commissioner General of the National Revenue Authority (NRA).
As Sierra Leone eagerly anticipates the arrival of these passenger railcars, this development marks a significant step forward in enhancing the country’s transportation infrastructure and fostering economic growth. The successful implementation of the passenger rail service is poised to benefit both local commuters and the broader national economy. Stay tuned for further updates on this exciting development.
