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Cablegate: Slow Customs and Poor Infrastructure Hurt Drc Port

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RR RUEHBZ RUEHDU RUEHGI RUEHJO RUEHMR RUEHRN
DE RUEHKI #0402/01 1280800
ZNR UUUUU ZZH
R 070800Z MAY 08
FM AMEMBASSY KINSHASA
TO RUEHC/SECSTATE WASHDC 7957
INFO RUCNSAD/SOUTHERN AF DEVELOPMENT COMMUNITY COLLECTIVE
RUEHXR/RWANDA COLLECTIVE
RUEAIIA/CIA WASHDC
RHEFDIA/DIA WASHDC
RUCPDOC/DEPT OF COMMERCE WASHDC
RUZEJAA/JAC MOLESWORTH RAF MOLESWORTH UK
RHMFISS/HQ USEUCOM VAIHINGEN GE

UNCLAS SECTION 01 OF 02 KINSHASA 000402

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: EWWT ECON ASEC MARR CG
SUBJECT: SLOW CUSTOMS AND POOR INFRASTRUCTURE HURT DRC PORT

REF: 07 KINSHASA 339

1. (SBU) Summary. As part of the effort to increase government
revenues, the GDRC has contracted with BIVAC to manage customs
inspection and collection. Combined with the poor state of Matadi
port facilities and the lack of transportation infrastructure
between Matadi and Kinshasa, the slower customs process has
exacerbated an already significant problem with a backlog of
containers at the port. DRC businesses that rely on importing
containers through Matadi are facing significant slowdowns and
increased costs due to the recent changes. End summary.

BIVAC Adds to the Problem
-------------------------

2. (SBU) The DRC Office of Customs and Excise Duties (OFIDA)
initiated a requirement as of January 1 for all imported containers
to submit to a Bureau Veritas/ BIVAC International inspection, in
conjunction with the Congolese Office of Control (OCC, the GDRC
equivalent of the Food and Drug Administration). The GDRC
implemented the measure for quality control purposes and to increase
revenues from import duties. Economic operators in the DRC must
now allow BIVAC to inspect all containers, verify the quantity and
quality of goods, and collect duties based on BIVAC's stated value
of the goods before taking possession. (Note: BIVAC/OCC charges 1.5
percent of declared value to inspect the imported goods, down from
3.0 percent in the past. End note.)

3. (SBU) Business-owners in Kinshasa told EconOff that they are
experiencing longer delays and rising costs as a result of the
change. Some importers said that BIVAC assesses the value of goods
higher than their actual value, and does not take into account
actual purchase price. BIVAC is also said to be taking samples from
containers and then not returning them, an unnecessary practice that
drives up costs for importers.

4. (SBU) Officials from the National Transport Office (ONATRA),
which functions as the port authority in the DRC, told EconOff
during an April 8 visit to Matadi (septel) that BIVAC is opening and
inspecting all containers, even if they are sealed and already carry
a BIVAC certification from its port of origin. (Note: BIVAC
normally is supposed to inspect containers prior to shipping from
overseas locations. End note.) Some ONATRA officials agreed that
this seems like an effort to increase both BIVAC and GDRC revenues,
albeit an unnecessary practice according to customs laws.

5. (SBU) ONATRA officials also said a container scanner was
scheduled for delivery on April 12, and would be added to the
process in some cases. (Note: The use of a scanner, if it does not
replace a BIVAC inspection, would be redundant and would add to the
delays. End note.)

Rehabilitation, New Port, or Both?
----------------------------------

6. (SBU) The BIVAC process is contributing to a significant
container backlog that already existed. The port of Matadi only has
four of its ten piers in operation, and only one land-based crane
that is still working. There is no separate area at the crowded
port for unstuffing the containers, and large logs floated down the
Congo River and then trucked to Matadi for export occupy up to a
third of the available space.

7. (SBU) The GDRC Minister of Transportation and Communication,
Charles Mwando Nsimba, visited the port of Matadi on February 15 and
16 to assess the extent of the backlog. Nsimba called for the
rehabilitation of the Ango-Ango port in Matadi and the Kenge port,
located 17 miles downriver from Matadi. The Minister of Economy and
Trade, Philippe Andre Futa, said on February 28 that the DRC was in
talks with investors to raise USD 58 million for the construction of
a new port. Futa said the port of Matadi is not functioning
properly and that a new one was needed to alleviate the congestion.

Lack of Roads and Trains
------------------------

8. (SBU) Poor infrastructure has been at the core of Matadi's
problems for years. ONATRA currently has only two locomotive
engines to transport containers by rail up to Kinshasa, and they
frequently encounter breakdowns and derailments. (Note: this is the
same railway created at the end of the 19th Century by Henry Morton
Stanley, made necessary by the fact that the Congo River between
Kinshasa and just above Matadi is a series of steep rapids. End
note.) The Ministry of Transportation and Communication does not
have the funds necessary to rehabilitate the railway or purchase new

KINSHASA 00000402 002 OF 002


locomotives. The two-lane road from Matadi to Kinshasa is repaired
almost every dry season, but the rainy season ruins the road and
adds hours to the 350 kilometer (220 mile) trip. A recent
truckdrivers' strike stopped traffic on the road for almost a week.


9. (SBU) Comment: Long delays in delivery due to conditions at
Matadi port and of the road and rail connection to Kinshasa prevent
businesses in the DRC from receiving much-needed raw materials for
their factories. Some companies may be forced to downsize as a
result of decreased production and slower business. These delays
are also contributing to rising food prices in the DRC, a problem
that will likely get worse in the near future. The slowness of the
BIVAC process is actually having an unintended adverse effect on
revenue collection in the GDRC because of the reduced number of
containers processed. The GDRC needs to stop the practice of taking
samples, and accelerate BIVAC operations. One businessman at the
recent Ambassador's Business Roundtable suggested that BIVAC
inspections done outside of the DRC cost the current 1.5 percent,
while those conducted upon arrival, if necessary, be charged at 3.0
percent of determined value. Finally, the GDRC needs to come up
with adequate funding for much-needed infrastructural improvements
if the DRC is to see any relief in the backlog at Matadi. End
Comment.

GARVELINK

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