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Cablegate: Niger Delta: Desopadec for Oil Community

VZCZCXRO2123
RR RUEHMA RUEHPA
DE RUEHOS #0793/01 3650832
ZNR UUUUU ZZH
R 310832Z DEC 07
FM AMCONSUL LAGOS
TO RUEHC/SECSTATE WASHDC 9663
INFO RUEHZK/ECOWAS COLLECTIVE
RUEHUJA/AMEMBASSY ABUJA 9407
RUEHNY/AMEMBASSY OSLO 0162
RUFOADA/JAC MOLESWORTH AFB UK
RUEKJCS/SECDEF WASHINGTON DC
RUCPDOC/DEPT OF COMMERCE WASHDC
RHMCSUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEAIIA/CIA WASHINGTON DC
RHEFDIA/DIA WASHINGTON DC

UNCLAS SECTION 01 OF 02 LAGOS 000793

SIPDIS

SENSITIVE BUT UNCLASSIFIED - HANDLE ACCORDINGLY
SIPDIS

STATE FOR AF/W, INR/AA, DS/IP/AF, DS/ICI/PII, DS/DSS/OSAC
OSLO FOR HELENA SCHRADER
DOE FOR GPERSON, CAROLYN GAY
TREASURY FOR ASEVERENS, SRENENDER, DFIELDS
COMMERCE FOR KBURRESS
STATE PASS USTR FOR ASST USTR FLISER
STATE PASS TRANSPORTATION FOR MARAD
STATE PASS OPIC FOR ZHAN AND MSTUCKART
STATE PASS TDA FOR NCABOT
STATE PASS EXIM FOR JRICHTER
STATE PASS USAID FOR GWEYNAND AND SLAWAETZ

E.O. 12958: N/A
TAGS: PGOV PREL SENV NI
SUBJECT: NIGER DELTA: DESOPADEC FOR OIL COMMUNITY
DEVELOPMENT; WILL THE MONEY GET THERE?

REF: LAGOS 07 502

1. (SBU) Summary: The Delta State Oil Producing Areas
Development Commission (DESOPADEC) has begun to develop
riverine areas by offering health care to 180,000 individuals
and by opening bids for more than 100 development projects.
A decrease in oil production meant DESOPADEC received USD 8.5
million in November (it receives 50 percent of Delta's 13
percent derivation); a Commissioner told Poloff DESOPADEC
would "do what it can" but that its allocation should be much
higher. End Summary.

--------------------------------
A Commission for the Communities
--------------------------------

2. (SBU) Community agitation led to the creation of the
Delta State Oil Producing Areas Development Commission
(DESOPADEC) under former Governor James Ibori and President
Obasanjo. Ibori appointed DESOPADEC Chairman Chief Okirika
and commissioners from oil producing communities; Uduaghan
appointed new commissioners following his May 2007
inauguration because communities had not approved of their
representatives. According to Okirika, commissioners
recorded short and long term needs of their communities,
which were provided by traditional rulers, leaders, women,
and youth. Okirika told Poloffs on December 13 that
DESOPADEC would meet community needs based on available
funding.

3. (SBU) The Commissioner of Health Education and Social
Services for DESOPADEC told Poloffs that unlike the Niger
Delta Development Commission (NDDC), which has a broad
regional mandate, DESOPADEC would succeed because it has a
more narrow focus.

--------------------------------------------- -----
DESOPADEC: 8 Commissions for Community Development
--------------------------------------------- -----

4. (SBU) DESOPADEC is divided into eight sections, each
overseen by a commissioner politically appointed by the
Governor from an oil producing community. DESOPADEC has
reportedly advertised contracts for over 100 projects in
local newspapers, according to Chairman Okirika. The
Chairman hoped these projects would be awarded in early 2008.
Below is an outline of DESOPADEC's sections and the status
of its projects:

--Industrialization of Degraded Environment (this area is
heavily reliant on technical partners and investors):

a. Ten modular refineries/gas gathering plants would be given
to communities, who would reportedly provide them with fuel.
Thirty percent of the plants' profit would go to DESOPADEC,
35 percent to investors, and 5 percent to the producing
community. (Comment: Detail as to how, exactly, oil or gas
would be obtained by communities and sent to these modular
refineries was sketchy. End Comment.)

b. DESOPADEC is interested in procuring reverse osmosis
equipment which could create up to 1,600 gallons of potable
water a day from humid air.

--Health, Education and Social Services: DESOPADEC has funded
primary health care clinics and will pay for needed hospital
operations; 180,000 individuals have reportedly received
medical care.


LAGOS 00000793 002 OF 002


--Infrastructure and Waterways: DESOPADEC would like to
introduce water taxis to riverine areas; this would require
jetty building and waterway dredging, Chairman Okirika said.

--Agriculture and Aquaculture: There are proposed centers for
rice, cassava, fishing, poultry, sugar cane, plantains, and a
pig farm. Six rice centers have been surveyed and are ready
for site-clearing.

--Micro Credit Facilities: DESOPADEC would like naira 1.4
billion (USD 11.9 million) to be available for micro credit
through local banking institutions. Consultants would teach
recipients how to spend their funds and respect their
obligations to the bank.

--Finance and Supply
--Project Inspection
--Legal Department

--------------------------------------
Finances: Don't Ask Too Many Questions
--------------------------------------

5. (SBU) On December 13, one commissioner told Poloffs
DESOPADEC receives 50 percent of the state's 13 percent oil
derivation allocation and is therefore dependent upon oil
production. DESOPADEC was given naira 35 billion (USD 300
million) when it was inaugurated and its November allocation
was over naira 1 billion (USD 8.5 million). However, our
contact said he could not give an exact figure and told
Poloffs he had learned not to "ask so many questions" about
revenue.

6. (SBU) DESOPADEC "does what it can" but funding levels
could be much higher, the commissioner said. Public
enlightenment is needed so that project demand could be
tailored toward available resources, he opined. However,
proper use of DESOPADEC's allocation depends upon the
integrity of all involved. There are currently no internal
controls to monitor areas for corruption, such as working
hours and illegal medical sales, he lamented.

----------------------------------
Share Facilities to Temper Rivalry
----------------------------------

7. (SBU) One commissioner said DESOPADEC-built structures
such as clinics, could be located near oil producing
communities, but also available to non oil producing areas
for all people to benefit. This, he contended, would
mitigate community rivalry and unrest.

-------
Comment
-------

8. (SBU) Chairman Okirika is well known in Delta State and
has been praised by other contacts (including youths) as
someone interested in community development. Okirika's
strong relations with Former Governor Ibori and current
Governor Uduaghan appear to be paying off since DESOPADEC
received its allocations, albeit less than hoped for.
However, it remains to be seen how transparent and
accountable its spending will be. End Comment.

9. (U) This cable was cleared by Embassy Abuja.
BLAIR

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