A bridge too far?By Simeon Kerr in Djibouti
Published: August 6 2008 (Medeshi)
Wedged between impoverished Ethiopia and lawless Somalia, and abutting pirate-infested shipping routes round the Horn of Africa, Djibouti (above) is known for little more than being one of the few remaining bases of the French Foreign Legion.
On the other side of the Red Sea in the south-west corner of the Arabian peninsula, Yemen has natural gas reserves and is trying to lure investment from its wealthy neighbours. But the country suffers from a shortage of fresh water and is beset by economic hardship, a persistent al-Qaeda menace and a Shia rebellion in the north.
It takes a leap of faith to believe that a private initiative can raise $200bn for what would be the world’s biggest engineering project to link the two countries.
Plans are afoot for such a scheme, however. The grandiose project is the brainchild of Tarek bin Laden, a brother of Osama and a member of the board of the Bin Laden Group, one of the Middle East’s most powerful construction companies.
The project is in its infancy – a memorandum of understanding with the Djibouti government has been signed – and many have dismissed it as little more than a pipedream.
Two cities – one in Djibouti, the other in Yemen – are envisioned at either end of a 30km bridge that will span the Bab al-Mandab (“Gate of Tears”) strait, at the south of the Red Sea.
Mr Bin Laden’s Middle East Development company is managing the project. “This is about outlining the vision, not the details,” said an MED communications adviser at a recent launch event in Djibouti.
The suspension-and-girder bridge alone will cost about $25bn. Its supports will be the size of the world’s tallest building.
The Bin Laden Group is not involved in the bridge and MED, which has worked in the booming Dubai real estate sector for the past few years, has a less than exemplary record when it comes to completion. The company’s two towers in the City of Arabia development in Dubai have been subject to delays.
Deleita Mohammed Deleita, Djibouti’s prime minister, has endorsed the bridge project, but Yemeni officials were absent from the launch ceremony. Muhammed al-Ahmed, chief executive of Noor City Djibouti, which forms part of the scheme, insisted that the sponsors had confidence in the Sana government and would, in time, launch the Yemeni end.
MED had spent “hundreds of millions of dollars” on the project already, Mr Ahmed said, but he would tap other sources of revenue to raise the almost $200bn development price tag.
In the absence of a full agreement, details of how the various parties would interact were vague, as were sovereignty issues.
Fostering trade between the two countries is the central aim of the highly ambitious project. Its success will depend on massive infrastructure development in eastern Africa where road and railway networks are notoriously dilapidated. Djibouti is bordered by Eritrea and Ethiopia – two of Africa’s poorest nations – and by Somalia, which has not had an effective central government for more than a decade and has been plagued by civil war.
There is little industry in Djibouti, and the tiny country of 800,000 relies heavily on port revenues. Unemployment is at about 56 per cent and, according to the World Bank, Djibouti has some of the highest rates of illiteracy, morbidity, and maternal and infant mortality in the developing world.
Yemen, meanwhile, is described by the bank as “the single largest development challenge in the Middle East”. According to a 2006 survey, 35 per cent of the population live below the poverty line.
Djibouti is emerging as a marine hub thanks to significant investment from DP World, the Dubai state-controlled terminals operator. Noor City plans to build on that base with further port and airport developments.
The intention is that natural gas will be pumped through a pipeline on the bridge from Yemen into Africa, with water flowing the other way from the source of the Nile in the Ethiopian highlands. Such a move would almost certainly upset Egypt and other Nile basin countries.
Railways to transport people and cargo would provide the main means of trade.
The countries of the Gulf Co-operation Council have for years mulled a rail network that would run down the Gulf and along Oman’s Arabian Sea coast. Momentum is building behind the long-stalled initiative as wealthy states look to deploy excess hydrocarbon revenues.
Noor City would help the Sana government extend the railway through Yemen’s restive southern tribal areas, according to Mr Ahmed. From there the line would join the bridge to Africa. But details on how a viable east African rail infrastructure could be developed are sketchy.
Mr Ahmed said that financing was set to come from seed funds, bonds and private equity, until the 10th year. At that point the company plans an initial public offering to coincide with what it believes will by then be a viable project.
FT
On the other side of the Red Sea in the south-west corner of the Arabian peninsula, Yemen has natural gas reserves and is trying to lure investment from its wealthy neighbours. But the country suffers from a shortage of fresh water and is beset by economic hardship, a persistent al-Qaeda menace and a Shia rebellion in the north.
It takes a leap of faith to believe that a private initiative can raise $200bn for what would be the world’s biggest engineering project to link the two countries.
Plans are afoot for such a scheme, however. The grandiose project is the brainchild of Tarek bin Laden, a brother of Osama and a member of the board of the Bin Laden Group, one of the Middle East’s most powerful construction companies.
The project is in its infancy – a memorandum of understanding with the Djibouti government has been signed – and many have dismissed it as little more than a pipedream.
Two cities – one in Djibouti, the other in Yemen – are envisioned at either end of a 30km bridge that will span the Bab al-Mandab (“Gate of Tears”) strait, at the south of the Red Sea.
Mr Bin Laden’s Middle East Development company is managing the project. “This is about outlining the vision, not the details,” said an MED communications adviser at a recent launch event in Djibouti.
The suspension-and-girder bridge alone will cost about $25bn. Its supports will be the size of the world’s tallest building.
The Bin Laden Group is not involved in the bridge and MED, which has worked in the booming Dubai real estate sector for the past few years, has a less than exemplary record when it comes to completion. The company’s two towers in the City of Arabia development in Dubai have been subject to delays.
Deleita Mohammed Deleita, Djibouti’s prime minister, has endorsed the bridge project, but Yemeni officials were absent from the launch ceremony. Muhammed al-Ahmed, chief executive of Noor City Djibouti, which forms part of the scheme, insisted that the sponsors had confidence in the Sana government and would, in time, launch the Yemeni end.
MED had spent “hundreds of millions of dollars” on the project already, Mr Ahmed said, but he would tap other sources of revenue to raise the almost $200bn development price tag.
In the absence of a full agreement, details of how the various parties would interact were vague, as were sovereignty issues.
Fostering trade between the two countries is the central aim of the highly ambitious project. Its success will depend on massive infrastructure development in eastern Africa where road and railway networks are notoriously dilapidated. Djibouti is bordered by Eritrea and Ethiopia – two of Africa’s poorest nations – and by Somalia, which has not had an effective central government for more than a decade and has been plagued by civil war.
There is little industry in Djibouti, and the tiny country of 800,000 relies heavily on port revenues. Unemployment is at about 56 per cent and, according to the World Bank, Djibouti has some of the highest rates of illiteracy, morbidity, and maternal and infant mortality in the developing world.
Yemen, meanwhile, is described by the bank as “the single largest development challenge in the Middle East”. According to a 2006 survey, 35 per cent of the population live below the poverty line.
Djibouti is emerging as a marine hub thanks to significant investment from DP World, the Dubai state-controlled terminals operator. Noor City plans to build on that base with further port and airport developments.
The intention is that natural gas will be pumped through a pipeline on the bridge from Yemen into Africa, with water flowing the other way from the source of the Nile in the Ethiopian highlands. Such a move would almost certainly upset Egypt and other Nile basin countries.
Railways to transport people and cargo would provide the main means of trade.
The countries of the Gulf Co-operation Council have for years mulled a rail network that would run down the Gulf and along Oman’s Arabian Sea coast. Momentum is building behind the long-stalled initiative as wealthy states look to deploy excess hydrocarbon revenues.
Noor City would help the Sana government extend the railway through Yemen’s restive southern tribal areas, according to Mr Ahmed. From there the line would join the bridge to Africa. But details on how a viable east African rail infrastructure could be developed are sketchy.
Mr Ahmed said that financing was set to come from seed funds, bonds and private equity, until the 10th year. At that point the company plans an initial public offering to coincide with what it believes will by then be a viable project.
FT
