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Rail multi-user clause chokes AML

Despite repeated clarifications by ArcelorMittal Liberia (AML) that its third proposed Mineral Development Agreement (MDA) does not seek exclusive control of the country’s two major infrastructures-the railroads and the port of Buchanan, clauses with the proposed deal say otherwise.

On page 7. 2(B) of the AML MDA, it states that “in consideration of the confirmed exclusive right of the Concessionaire to complete the additional railroad capacity expansion pursuant to this subparagraph 2 above, the Concessionaire shall pay to the Government a nonrefundable amount of fifty-five Million Dollar (US$55,000,000.00). The payment shall be made in three installments the first being payment of twenty million dollars (US$20,000,000.00) being made no later than 30days after the (ratification of the) third amendment, the second payment twenty-five million dollars (US$25, 000,000.00) being no later than 9 months after the date of the first payment and the third ten million dollars (10,000,000.00), being no later than 9 months after the second payment.”

But ArcelorMittal has maintained that its proposed agreement, the third to its initial MDA signed in 2005 does not seek any exclusive rights to the use of the state-owned infrastructures.

Although the House of Representatives passed on the MDA last year, it did so with a resolution.

The House’s Joint Committee on Investment and Concession, Ways, Means & Finance, Judiciary, Lands, Mines & Energy and Environment, in its resolution, indicated that Article 3 of the proposed Amendment called for the company to have exclusive rights over the country’s railroads and the Port of Buchanan, something the committee argued is seen as a completed monopoly of the government’s two major infrastructures.

The House Committee further went on to urge the Government to take ownership of the railroad, Buchanan Iron Ore Port and related infrastructure. It further recommended that these infrastructures be structured, regulated, expanded and managed on a non-discriminatory multi-user basis for the benefit of all eligible applicants within the country.

Both the EU and the US Ambassador here have expressed some concerns as well over the exclusive rights clause within the MDA.

EU High Representative Josep Borrell was questioned about the agreement in last month.

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The EU Parliamentarians concerns followed reports suggesting that the new ArcelorMittal MDA is shrouded in secrecy.

Thus, the EU has raised questions over the possibilities of corruption, the potential creation of rail monopoly and the involvement of the population.

The EU also wonders if the new deal MDA compatible with its objectives of promoting good governance and sustainable development in Liberia.

The Union questioned its Vice-President of the Commission / High Representative of the Union for Foreign Affairs and Security Policy (VP/HR) of any awareness of the controversies surrounding the ArcelorMittal MDA being raised with the Liberian authorities.

The Senate is yet to pass on the MDA since the approved version by the lower House was sent there for concurrence. This may be so due to the debate arising from the multi-user clauses within the MDA.

State and Presidential Affairs Minister Nathaniel F. McGill commenting on the debate during a press conference last week said Government owns the railroads but other companies wishing to use the assets will have to contribute towards the expansion project just as AML.

SOLWAY and other potential companies such as HPX which have interest in using the rail have opposed no objection in contributing towards the expansion project but want the ambiguity surrounding the multi-user to be cleared. https://thenewdawnliberia.com/arcelormittal-deal-pt-2-gol-to-lose-us2-68bn-in-rail-user-fees-alone/

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The New Dawn is Liberia’s Truly Independent Newspaper Published by Searchlight Communications Inc. Established on November 16, 2009, with its first hard copy publication on January 22, 2010. The office is located on UN Drive in Monrovia Liberia. The New Dawn is bilingual (both English & French).
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