Transgabonais concession

cancelled

In 1999, Transgabonais was awarded a 20 year concession contract to rehabilitate and operate the railway that linked Owendo to Franceville. Transgabonais was a consortium of the 51% state-owned national logging company Societe nationale des bois du Gabon (SNCB) (43.1%), Belgian firm Transurb Technirail Transurb (11.6%), Deutsche Investitions und Entwicklungsgesellschaft (DEG) (16.33%) and several other private companies each with a small shareholding. The company took over the operation of the railway in December 2000, and was to operate the facility for a 20-year period. Before 1999 the railway was run by the state-owned company Office du chemin de fer transgabonais (Octra). A total of US$31.4 million was paid by the sponsors for the concession rights (20.5 billion CFA francs). The railway was mainly transporting manganese. In May 2003, the government terminated the concession contract. The government claimed that the operator had failed to pay its concession fees, meet required investment, provide sufficient business accounts, and meet facility maintenance expectations. One of the project sponsors, Compagnie d'Exploitation du Chemin de Fer Transgabonais, was expected to file a claim against the Gabonian government with an international arbitration tribunal (International Centre for Settlement of Investment Disputes - ICSID) in 2004. Setrag, a subsidiary of South African company Compagnie miniere de l'Ogooue (Comilog) which belonged to French group Eramet, was temporarily granted a management contract over Transgabonais after the concession termination. Setrag was expected to operate the railway until the government rewarded the operation of the railway. For updates on the arbitration proceedings, check: www.worldbank.org/icsid (case n. ARB/04/5)