Exporters will fund port rehabilitation: at long last, it seems that Liberia's ports, all of which are in a general state of disrepair, will be given a new lease of life to ensure the smooth export of rubber and iron ore. Neil Ford reports

African Business, April, 2008 by Neil Ford

Several Liberian ports are to be redeveloped in the latest stage of efforts to rebuild the West African country's infrastructure after the devastation of its long civil war.

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The Cavalla Rubber Corporation (CRC) plans to rehabilitate the port of Harper, largely in order to ship its rubber production out of the country; Buchanan is to be brought back into use to serve the iron ore industry and Monrovia needs to be redeveloped as the country's main port.

While donor support will be required on Monrovia, private sector companies are to fund the other two schemes as part of integrated investment packages for the country.

At present, only Monrovia is a functional multi-use port, as the country's other three ports, Buchanan, Greenville and Harper are all in urgent need of investment and currently handle only timber products. However, Harper could be first in line for a major overhaul following the announcement that CRC has held talks with Liberia's National Port Authority (NPA) over the port's future.

Ownership of many Liberian plantations was disputed after the end of the war and the Rubber Planters Association of Liberia was given a one year temporary contract to manage the Cavalla rubber plantations.

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However, last December ownership passed to CRC, which is owned by Salala Rubber Investments, which in turn is a subsidiary of one of the world's biggest rubber firms, Dutch company Acomo. The company hopes to supply Michelin with its Liberian rubber. CRC is reported to be investing more than $25m in the Cavalla plantations and it now needs to find an outlet for its exports. Harper has been barely used for many years but it is hoped that both bulk and container facilities can be installed at the port, while new cargo handling equipment will be required and the harbour basin may need redevelopment.

Putting together a financial package may take some time but CRC has already committed $1m to road redevelopment in the area and will probably have to provide much of the project finance, although donor loans could also make a contribution.

Iron ore conduit

While Harper is set to become a rubber port, Buchanan should also be redeveloped to take advantage of another of Liberia's main raw materials. As reported in African Business in March, Arcelor Mittal has agreed to increase its investment in Liberian iron ore production from $lbn to $1.5bn. The company's chairman, Lakshmi Mittal, held a press conference with Liberia's President Ellen Johnson-Sirleaf to unveil his plans and to announce a full assessment of the ore reserves at Yekepa.

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The ore will be transported via rail from Yekepa to Buchanan, from where Arcelor Mittal plans to begin shipments from mid-2009.

Both the railway and the port will require structural redevelopment and new investment in dry bulk handling facilities, which is expected to be provided by the Indian firm.

A $21m contract for engineering work on the port and railway has already been awarded to Odebrecht. In addition, Monrovia is confident that a survey of the country's other iron ore deposits should result in further iron ore deposits and yet more demand for port capacity over the next few years.

The award of one iron ore concession remains in doubt. South Africa's Delta Mining Consolidated appeared to have been awarded the concession to develop the Western Cluster iron ore deposits, which had been mined before the war. After Johnson-Sirleaf announced the company's success in the first round of the tender, many Liberian commentators questioned the company's ability to do the job, partly because of the firm's lack of international profile.

However, it now appears that Delta Mining has merely been put at the top of a shortlist of those companies listed for further consideration. Sinosteel of China and India's Tata Steel, the world's sixth biggest steel producer, are among the other companies listed.

An inter-ministerial technical committee chaired by the Ministry of Land, Mines and Energy will now asses the bids. The project investment costs are estimated at $1.6bn and as on other similar schemes include the development of port, road, rail, power and water infrastructure. The Liberian government's finances remain very tight and any money available for port development is likely to be dedicated to Monrovia, where many different users will be able to take advantage of it.

In addition, it is hoped that the freeport of Monrovia could become the main investment hub for the entire country in the longer term. In early March, a delegation of British businesses, including Infrastructure Development Group (IDG) Maritime and Coastal Reclamation Engineering Services visited the Liberian capital to assess the state of the port and to hold talks with the NPA an the National Investment Commission.

According to a spokesperson for the delegation, it is possible that a British consortium will bid for a 25-year concession to overhaul the freeport, which he conceded was currently in a poor state of repair.