The signing of a Memorandum of Understanding between Leone Rock Metals Company, a subsidiary of Kingho Rail and Port Company, and CTC Mining, a bauxite mining company in Sierra Leone for the use of the rail and port facilities at Pepel, has been viewed by many Sierra Leoneans as a violation of the right of the people to own property and an exploitation of the friendly relationship that had existed between the government and people of Sierra Leone and the People’s Republic of China.
The Pepel port and railway are both owned by the government and people of Sierra Leone, which has the sole right, in accordance with stipulated contract provisions with any company, to have full use of the facilities and to enter into any contract with any party within the ambit of the law.
It could be recalled that the government entered into a contract with Kingho Rail and Port company in October 2020 to refurbish and manage the rail and port facility at Pepel for six years, with a caveat for a review after two years of operation, during which period the government has the right to contract a third party. These were all part of the contract provisions signed with Kingho in October 2020.
Unfortunately, after two years of operation, the government, not being satisfied with the operations of Kingho, terminated the said rail and port contract with a notice of termination issued to the company, as well as information that the government is entering into another contract with Arise IPP for the refurbishing and running of the rail and port services, as well as expansion of same to as far as the Republic of Guinea.
This move, according to the government, will bring onboard other players in the sector, and also give access to citizens of both countries to trade freely, as the rail service will facilitate transportation of goods and services between the two countries, as well as enable farmers along the route to convey their products to other parts of the country, including the capital, Freetown, thereby reducing the cost of transportation and eventually the cost of those goods.
Both countries will also benefit from tax revenue as the move will also see more revenue generation for the government through increase in royalties paid by the companies that will be using the service, as their profit margins will increase due to a marked reduction in the cost of transportation of their products from their respective mines to the port, including more taxes paid as trade is enhanced through these services.
It is against this backdrop that the illegal action of Leone Rock to enter into an agreement with CTC Mining, when it is very clear that the contract with their subsidiary had been terminated, has been seen as an infringement on the right of the government and people of Sierra Leone to their rail and port property.
According to many concerned Sierra Leoneans, the relationship between the country and China has been very cordial and productive, but that does not mean that a company belonging to China should be allowed to abuse this relationship. It is clear that the government entered into a business agreement with the Chinese company, Kingho Rail and Port Company for the refurbishing and management of the country’s rail and Port at Pepel for a six-year period, but that after two years of operation, the government had the right to review and even invite another party.
The government, desirous of expanding the services to other players, including its citizens, decided, in accordance with the agreement to terminate the rail and port contract with Kingho, and entered into another agreement with another company, Arise IPP, which was to take over the operations of the rail and port, and to as well expand the rail to as far as neighboring Guinea. This move is in the best interest of the country, as it will see marked improvement in trade between the two countries, increase in revenue from taxes, etc.
But this action by the government has been opposed by Kingho on the grounds that the contract between them and the government was for six years, although they failed to recognise the two year caveat stipulated in the said contract for review. As the government terminated their contract and replaced it with another company, Kingho threatened to go to court, but to date, no court paper has been served on the government in respect of the said termination. As a result, nothing will stop the government from continuing with the new contract signed with Arise IIP. This eventually prevents Kingho or its subsidiary from entering into any contract in respect of the said rail and port services.
Therefore, many see the signing of the MoU with CTC by a subsidiary of Kingho Rail and Port Company for the use of the services as the Chinese company deliberately exploiting the relationship between their government and the people of Sierra Leone, much to the detriment of Sierra Leoneans.
This move is tantamount to double crossing, backstabbing and double dealing. These character traits are not the hallmarks of a true and friendly relationship between peoples and nations. Chinese private companies exist under the friendship that exists between Sierra Leone and China. By signing the MoU with CTC Mining, Leone Rock is trying to preempt the government from its agenda for the port and rail, something we expected Leone Rock to have been mindful of while executing the terms and conditions of the contract with GOSL. After not seeing progress GOSL invoked the caveat in the contract by cancelling the contract and introducing a third party, Arise IIP. But by going behind the government and signing the MoU, Leone Rock was also trying to prevent Arise IIP from entering Sierra Leone and doing all that is expected of them.
This action by Leone Rock has therefore been seen as a complete disrespect for the authority of the government and people of Sierra Leone, and anyone signing such agreement with Leone Rock including CTC will be doing so at their own risk.