The Pepel Railway and Port was refurbished by African Minerals Limited with loans provided by China Exim Bank and Standard Bank of South Africa. The rehabilitation of the former Marampa mining railway and port cost a staggering US$1.2 Billion. The project was done on a BOT (Build, Operate and Transfer) basis.
After twenty years of operation, the assets were finally transferred to the Government of Sierra Leone in 2020. They became 100% Government property.
In 2021, the Government of Sierra Leone leased the assets to Kingho Railway and Port Company Limited. After two years, the Government decided to terminate the lease agreement with Kingho Railway and Port Company Limited on 10th January, 2023.
Before the lease agreement was terminated in January 2023, Kingho was paying a flat rate of US$1,250,000 (One Million two hundred and fifty thousand US Dollars) as annual lease rent to the Government of Sierra Leone. That amount has been described by industry experts as a pittance.
All along, some of us have advocated for a private company to develop and manage the Pepel Railway and Port on behalf of the Government of Sierra Leone. Several private companies have applied for the Railway and Port to be leased to them, for an annual fee, far higher than what Kingho was paying before their agreement was terminated in January 2023.
Even with the new 20-year agreement about to be signed, Kingho have only agreed to pay US$1.5million a year as lease rent to the Government of Sierra Leone. That, again, is a ridiculous amount. Since the Kingho lease agreement was terminated in January this year, how much have they paid to the Government of Sierra Lone as lease rent for the use of the facilities?
Currently, the only agreement that is supposed to be in force (and that is legally in force) is the agreement signed between the Government of Sierra Leone and ARISE IIP for the management of the Pepel Port and Railway.
We suggest that, the on-going negotiations with Kingho for the management of the Pepel Railway and Port be put on hold until the issue of the lease agreement signed with ARISE IIP is fully addressed.
We cannot afford to undermine investor confidence by engaging in such illegal way of handling signed contracts or agreements.
The credibility of the Government is at stake. It is important to point out that, ARISE IIP still have a valid agreement with the Government of Sierra Leone, approved by the Cabinet to develop, expand and manage the Pepel Railway and Port. That agreement has never been terminated by the Government of Sierra Leone.
We urge the Government of Sierra Leone to reflect on the international reputational damage that the decision to unilaterally cancel a signed agreement or contract can do to the country if they are pursued.
Does the Government really know the value of the Railway and Port assets that they have at Pepel? We doubt it!
We call on the Government to tread carefully as they continue to negotiate a new lease agreement with Kingho for the management of the Pepel Railway and Port.
We still insist that, the only valid agreement currently in force for the management of the Pepel Railway and Port is the one that the Government of Sierra Leone signed with ARISE IIP.
Period!
