The Sudanese government has made the second partial repayment of the upfront fee it received from International Container Terminal Services, Inc. (ICTSI). The repayment was made in view of the government’s failure to turn over on schedule to the port operator the South Port Container Terminal (SPCT) at the Port of Sudan.
In a regulatory disclosure on December 13, ICTSI said it has received AED110.190 million (about EUR27 million) as second partial repayment of the EUR410 million upfront fee that ICTSI made after winning the concession contract of the container terminal last January.
The second partial repayment was in addition to the first partial repayment amounting to EUR195.2 million made by Sudan’s Ministry of Finance and Economic Planning.
The remittance to ICTSI came after the Sudanese government failed to turn over SPCT to the port operator by the April 7, 2019 deadline due to the ongoing political instability in the Northeast African country.
ICTSI said it is in continuous discussion with the Sudanese government on the refund of the remaining balance of the upfront fee under the terms of the refund bond.
Despite this development, ICTSI said it continues to reserve its rights under the concession agreement.
Last January, ICTSI, through its wholly owned subsidiary ICTSI Middle East DMCC, signed a 20-year concession agreement with Sea Ports Corporation of Sudan (SPC) to operate, manage, and develop SPCT.
With the concession, ICTSI was supposed to assume the responsibility for operating and developing SPC’s existing container terminal infrastructure and terminal handling equipment.
Meanwhile SPC—the independent state corporation that governs, constructs, and maintains Sudan’s ports, harbors, and lighthouses—will become the landlord and supervisory authority for the terminal.
The terminal, which has a capacity in excess of 1 million twenty-foot equivalent units (TEUs), had a throughput of 470,000 TEUs in 2017.
The SPCT has a 180-hectare land area, as well as a 1,200-meter quay wall with a designed water depth of up to 16 meters that can receive the largest container vessels.
It features state-of-the-art container terminal assets, eight ship-to-shore gantry cranes, and an extensive range of yard handling equipment, including more than 20 rubber-tired gantry cranes.
Last March, former Sudanese President Omar al-Bashir ordered the concession agreement reviewed after hundreds of port workers went on strike in February to protest the turnover of the terminal to ICTSI. In April, Bashir was arrested and forced down from power in a military coup.
In May, Sudan’s Transitional Military Council issued a presidential decree “to suspend the contract of the Filipino company working at Sudan’s southern port until legal measures are completed to cancel the contract.”
In response, ICTSI in a statement said it had “validly procured” the agreement but noted that if the Sudanese government decided to cancel the contract, it would fully cooperate.
However, the company also said it would execute the contract if the current government decided to accept the terms agreed upon with the previous government.
