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Cablegate: Drc Outsources Management of Sncc And

VZCZCXRO2685
RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMR RUEHRN
DE RUEHKI #1429 0010808
ZNR UUUUU ZZH
R 010808Z JAN 08
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 7322
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY
RUEHXR/RWANDA COLLECTIVE
RUEAIIA/CIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUFOADA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/HQ USEUCOM VAIHINGEN GE

UNCLAS KINSHASA 001429

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON EINV ELTN PREL PGOV CG
SUBJECT: DRC OUTSOURCES MANAGEMENT OF SNCC AND
ONATRA TO BELGIAN AND SPANISH COMPANIES

1. (U) Summary. The Steering Committee for the Reform of the Public
Sector (COPIREP) solicited private sector bids for the management of
the Congolese national railroad company (SNCC) and national
transportation company (ONATRA) ports. The GDRC Council of
Ministers has approved the awarding of management contracts to
Belgian-owned Vecturis, for SNCCn and Spanish-owned Progosa for the
ONATRA ports, although the contracts have not yet been signed.
Vecturis and Progosa apparently beat out TranSystems, a U.S.
transportation consulting company that says it bid on both
contracts. TranSystems is currently protesting the bidding process.
End Summary.

Background
----------

2. (U) The Comite de Pilotage de la Reforme des Entreprises
Publiques (COPIREP) was established in 2002 to create an
institutional and legal framework for the reform of parastatal
companies. The World Bank provided technical assistance and funded
the creation of COPIREP with a six-year USD 120 million grant.
COPIREP promoted public-private partnerships as a solution for
failing DRC parastatal companies and, in 2005, managed the
restructuring of Gecamines, the DRC mining parastatal, by
outsourcing its management. As part of its ongoing reform of public
sector companies, COPIREP solicited separate bids in September 2007
to take over management of both SNCC and the ONATRA ports.

CONTRACTS AWARDED
-----------------

3. (U) The GDRC Ministry of Transport and the Ministry of Parastatal
Enterprises issued a joint report on December 21 in support of
Vecturis (Belgium) and Progosa (Spain) for the SNCC and ONATRA
contracts, respectively. The Minister of Parastatals, Jeannine
Mabunda, said Vecturis and Progosa submitted bids with the lowest
costs for the technical assistance. The Council of Ministers agreed
with the assessment, and plans to issue two-year management
contracts to each company.

4. (SBU) TranSystems, based in Kansas City, says it also submitted
bids in September 2007 for both contracts. According to a message
received from CEO Frank DeCaro, TranSystems is the only company to
have submitted at least one of the bids on time. TranSystems did
not make the final bid selection for the SNCC contract, but
TranSystems and Progosa were reportedly the only two companies
considered for the ONATRA contract. DeCaro is protesting the
decision by COPIREP based on suspicion of fraud and/or bribery on
the part of Progosa.

Garvelink

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