AYV News, October 6, 2023
ARISE Integrated Industrial Platforms (ARISE IIP), a developer and operator of world-class industrial ecosystems across Africa, is set to invest over US$400 million in expanding the rail and port should the Government of Sierra Leone honor its side of the already signed ‘Pepel Port and Pepel – Tonkolili Railway Development, Expansion and Management Lease Agreement’.
The Pepel Railway and Port was refurbished by African Minerals Limited with loans provided by China Exim Bank and Standard Bank of South Africa. The rehabilitation of the former Marampa mining railway and port cost a staggering US$1.2 Billion. The project was done on a BOT (Build, Operate and Transfer) basis.
After twenty years of operation, the assets were finally transferred to the Government of Sierra Leone in 2020 and became 100% Government property.
In 2021, the Government of Sierra Leone leased the assets to Kingho Railway and Port Company Limited. After two years, the Government decided to terminate the lease agreement with Kingho Railway and Port Company Limited on 10th January, 2023.
Before the lease agreement was terminated, Kingho was paying a flat rate of US$1,250,000 as annual lease rent to the Government of Sierra Leone. That amount has been described by industry experts as a pittance.
Some Sierra Leoneans have been advocating for a private company to develop and manage the Pepel Railway and Port on behalf of the Government. Several private companies applied for the Railway and Port to be leased to them, for an annual fee, far higher than what Kingho was paying before their agreement was terminated.
Even in a said new 20-year agreement about to be signed, Kingho has only agreed to pay US$1.5million a year as lease rent to the Government of Sierra Leone. That, again, is a ridiculous amount.
Since the Kingho lease agreement was terminated in January this year, people are eager to know how much have they paid to the Government of Sierra Lone as lease rent for the use of the facilities?
Currently, the only agreement that is supposed to be in force (and that is legally in force) is the agreement signed between the Government of Sierra Leone and ARISE IIP for the management of the Pepel Port and Railway.
Many Sierra Leoneans have suggested that, the on-going negotiations with Kingho for the management of the Pepel Railway and Port be put on hold until the issue of the lease agreement signed with ARISE IIP is fully addressed.
The Government of Sierra Leone cannot afford to undermine investors’ confidence by engaging in such illegal way of handling signed contracts or agreements.
The credibility of the Government is at stake.
It is important to point out that, ARISE IIP still has a valid agreement with the Government of Sierra Leone, approved by the Cabinet to develop, expand and manage the Pepel Railway and Port. That agreement has never been terminated by the Government of Sierra Leone.
The Government of Sierra Leone is urged to reflect on the international reputational damage that the decision to unilaterally cancel a signed agreement or contract can do to the country if they are pursued.
Does the Government really know the value of the Railway and Port assets that they have at Pepel? The Government must tread carefully as they continue to negotiate a new lease agreement with Kingho for the management of the Pepel Railway and Port.
In a significant development for Sierra Leone’s transportation sector, Arise IIP has procured and shipped seven passenger railcars and their associated critical spares from Japan, with an anticipated arrival at Freetown Port on October 26, 2023.
This underscores 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.
General Manager of Interface at Arise IIP, Samuel Komba Kambo, said the Company is diligently preparing for the reception of these railcars, including the mobilisation of necessary equipment to safely unload, transport, and park them along the rail infrastructure.
One notable aspect mentioned in the letter is 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.
The letter has been copied 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 awaits the arrival of these passenger railcars as 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.
It is expected that with the commencement of passenger train transportation by ARISE IIP the impact will be great as there are many people to benefit from it at the initial stage before any move is made to expand the routes that these commercial railcars will later on ply.
The project will expand economic activities by providing jobs for Sierra Leoneans and enable passengers’ locomotion from Tonkolili through Bombali to the Port Loko district.
Currently, the Company is undertaking massive infrastructural works at the SIZ – Koya industrial zone and this asset, in line with ARISE IIP’s ambition to unlock Africa’s industrial potential, will support Sierra Leone in advancing the country’s industrialisation agenda.
Â
