Was NAWEC forced to buy Brikama power station from Mohamed Bazzi?

On December 10th, 2014, we asked the question "Was NAWEC forced to buy the Brikama power station from Muhammed Bazzi?"  Mr. Fadi Mezaggi partially answered the question at yesterday's Commission of Inquiry into the illicit wealth of Yaya Jammeh.   We are republishing that piece here where the then Minister of Finance (Kebba S. Touray) tried to partially blame the ballooning fiscal deficit on the "spending on NAWEC's behalf" that government had to make.   Here's the piece.
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In what appears to have been a leaked Cabinet Paper (CP) of the Minister of Finance, Kebba S. Touray, laying out the outline of his 2015 Budget Estimates, several stauning revelations and admissions were made to his cabinet colleagues.

The CP's preamble warns of the impending hardship that Gambians should expect in 2015 because of the rapidly deteriorating fiscal condition resulting from imprudent fiscal and monetary management of the economy.

The deficit which was projected to be in the region of 4.5% of GDP is now projected over twice that to 10% of GDP, forcing the Finance Minister to admit to both the Joint National Assembly Members last week, and now his cabinet colleagues that "2015 is not going to be easy."

Despite numerous warnings by the International Monetary Fund (IMF) of the devastating effects a ballooning deficit will have on the overall performance of the economy, the regime of Jammeh has proven unable to control spending most of which are of the frivolous kind that contributes nothing to economic growth.

The latest explanation of the ballooning deficit is what the Minister described as "spending on NAWEC's behalf" equivalent to 2.5% of GDP which we estimate to be in the region of GMD 783 million.  What was the amount for?  It now appears that NAWEC was forced to buy the Brikama plant from Mohamed Bazzi, Jammeh's business partner.

We look forward to the Minister's  Budget Statement in the next few days to see if further details are provided to Gambians about this particular expenditure, the rationale for the sale and terms and conditions of the sale.  

State-sponsored corruption at the Gambia National Petroleum Corporation - Part IV

This is a republication of an earlier piece, first published July 4th 2016

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Mohammed Bazzi

The decision to supply NAWEC a stock of petroleum products valued at $ 24.2 million that belonged to Total International was taken by the private investors who had controlling shares and occupied senior management positions at Gam-Petroleum Storage Facility Company.

The decision to knowingly supply fuel belonging to Total International was taken by Mohammed Bazzi, Fadi Mazeggi and Amadou Samba according to official records. This conclusion was reached by Ministries of Finance and Energy, Central Bank officials, Social Security and Housing Finance Corporation and Gambia Ports Authority officials who attended the meeting.  Conspicuously absent from the meeting was a representative of the Office of President - the office that supervises both the Energy and Petroleum Ministries.

The exact figure of the value of the Total International stock was said to be US $ 24,188,951.05 which, according to official records is "part of NAWEC's total liability to Euro Africa Group, estimated at $ 64,000,000."  Since the $ 64 million is an estimate, it should treat it as such until a final definitive figure is available.

By invoking the collateral clause of the storage agreement between Gam Petroleum Storage Company and Total International, the regime of Yaya Jammeh was forced to either pay up the $ 24.2 million or forfeit the storage facility that cost US$ 50 million to build.  (How the project was financed becomes a central issue which we will be examining in subsequent blogs.)

To avoid the unthinkable alternative of forfeiture, the regime f Yaya Jammeh decided to "nationalize" the Mandinari Storage facility by "buying out" Bazzi, Mazeggi and Samba.  NAWEC's balance sheet needs to be sanitized by engaging its creditors to restructure its debt which has ballooned to D 4.585 billion.  As a primary consumer of petroleum, it makes sense to restructure not only NAWEC's debt but its organizational and managerial structure which the World Bank had been recommending for quite sometime.

The buy-out of the private investors was made possible only when Bazzi, Mazeggi and Samba agreed that their proceeds from the transaction will go into settling the $ 24.2. million with Total International.  Their shares were subsequently distributed among government agencies as follows :- SSHFC (30%), GPA (30%), GNPC (30%) and Ministry of Finance (10%).

It is important to note, for future reference, that the individual shares were valued at €350,000 per share, a figure based on valuation made in 2009 when the three private investors purchased their shares.

The restructuring plan, including the new share structure, was unanimously approved by the Board of Directors of the Gam Petroleum Fuel Storage chaired by Amadou Samba, Fadi Mazeggi, private investor and attended by Mr.   Badgie, Managing Director, GNPC, Mr. Edward Graham, Managing Director, SSHFC, Mr. Alhagie Cherno Ceesay representing GPA, Ms. Farage, Secretary to the Board, Mr. Edirissa Mass Jobe, Board Member.

In an unusual move by Yaya Jammeh, he announced that his regime has uncovered "one of the biggest economic crimes" in the 22-year history of the Second Republic before proceeding to direct his security agents to round up ten former and current senior officials in the Petroleum Ministry including Sira Wally Ndow Njie, a former Minister of Petroleum and Edrissa Mass Jobe a businessman who is close business associate of the Gambian dictator and someone who brought Elton petrol stations to The Gambia.  Mr. Jobe is also a Board member of the GNPC that is at the center of the current scandal.

It was reported last week that the lawyers of both Mr. Jobe and Mrs. Sira Wally Ndow Njie had filed bail application for their release from remand at Mile II prisons.  However, we have now learned that for some unexplained reason or reasons, the applications have been withdrawn by their attorneys. Unconfirmed reports have it that a deal is being worked out for their release from jail.  Whether the accused will be exonerated and their cases dismissed is unclear.  Watch this space.

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POSTSCRIPT: This is the final installment of a four-part series on how the state is central and a facilitator to the Gam-Patroleum corruption scandal that Jammeh described as one of the biggest economic crime ever committed under his watch.  Jammeh cannot be totally oblivious of all of the stench that has been swirling over his head for all these years.

Subsequent blogs will be treating other components of the sandal individually.  For example the capitalization of the initial project investment of $ 50 million and whether Gambia's sovereign guarantee was issued by the Central Bank.

Related issues such as the transfer of ownership of the Brikama Power Station from Mohammed Bazzi who has been operating it for five years as BOT project to NAWEC has been updated here when the then Minister of Finance, Kebba Touray, paid "on behalf of NAWEC" over $ 30 million will be closely examined.  We can now say the money went to Bazzi. How it was distributed to "investors" is anyone's guess.

State-sponsored corruption at the Gambia National Petroleum Corporation - Part III

 A republication of a piece first published last February

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This is Part III of a four part series that we ran last year on the downstream petroleum sector.  This part deals with the ownership structure of the GNPC from its inception to when the regime of Jammeh was forced to buy-out Bazzi and partners.  This involuntary - or more appropriately, forced divestiture - was made possible because of a little known clause, apparently buried in the agreement, that many government official said they were unaware of its existence, made it possible for the non-government shareholders to milk the alliance for 5 years before off-loading the liabilities of the GNPC to government.

We, at sidisanneh.blogspot.com, have been focusing more of our attention on the downstream activities that involves GNPC with little attention paid to the off-shore or upstream activities of Yaya Jammeh who was, without doubt, the dominant player and most consequential player in these activities that have resulted in arbitration, cancellation and reinstatement of contracts.  There is no doubt that the entire set of agreements with African Petroleum Corporation and other foreign companies must be reviewed to ensure equity.  Our next new blog post will be looking at these developments and how they will impact future petroleum exploration in The Gambia.

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Yaya Jammeh, Head of the cartel 

The one-of-a-kind 51,000 metric-ton petroleum storage facility built in 2008 at a cost of $ 50 million and located at Mandinari village was jointly owned by a consortium of public enterprise and private individual investors until it was 'nationalized' last year.

Social Security and Housing Finance (31%), Gambia Ports Authority (10%) and Gambia National Petroleum Company Ltd (7%) represent government share in the venture that totals 48%.

The private investors led by the Lebanese-Syrian, Mohammed Bazzi (30.8%) comprise of another Lebanese, Fadi Mezaggi (10.3%), a Gambian, Amadou Samba (9.9%) and Premier Investment Group (1%) which is jointly owned by Mr. Bazzi and Fadi Mezaggi.  How the 1 per cent is shared among the two is unknown.  The two, however, control 42.1% of the facility and with Amadou Samba's 9.9%, the private investors control the facility with 52% an with it the management and operations of the facility.

The Gam-Petroleum Storage Facility Company, as the company is officially known, had two other strategic entities who do not own shares in the company but are critical to the viability of the venture.

The two non-shareholding strategic partners were Total International and the National Water and Electricity Company (NAWEC) - the former serving as the international procurement arm and the latter as the single biggest consumer of heavy and light fuel oil and other petroleum products.

Total International is a French multinational energy company that enjoyed the exclusive right to procure petroleum and petroleum products on behalf of Gam-Petroleum Company and also for its own retailing purposes.  NAWEC on the other hand is a public enterprise whose current liabilities as at 31st October 2014 stood at nearly D 5 billion, D 3 billion of which was outstanding heavy fuel bills owed to supplier.

A separate storage agreement was entered into between Gam-Petroleum and Total International, the details of which are not known in full.  According to official documents government - at least, one or more key ministries - was unaware that the storage facility was used as collateral with obviously the full knowledge and approval of the majority shareholders and Total International.

The fact that the storage facility was used as a collateral without the knowledge of a certain segment of the government, came to light when another surprise was sprung on a regime that is either incompetent or corrupt or both.  It was discovered that the private investors i.e. Messrs. Bazzi, Megazzi and Samba had supplied stock belonging to Total International to NAWEC without the knowledge of the owner.

The discovery was by Total International when it went to access its stock and it was empty who immediately invoked the collateral clause by demanding full and immediate payment of US $ 24.2 million, barring which investors will forfeit the facility.  Under the agreement Total International will take possession and the subsequent selling of the facility, depriving all shareholders, including government of ownership.

During the negotiations, it was revealed that the US$ 24.2 million owed to Total International is inclusive of the US $ 64 million Mohammed Bazzi claimed NAWEC owed to the Euro Africa Group, a company owned by the same Mohammed Bazzi.
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Part IV will look at the events following Total International's decision to invoke the collateral clause, matters relating to NAWEC debt settlement proposal and its implications on the future of the national electricity company.          

State-sponsored corruption at the Gambia National Petroleum Corporation - Part II

This is re-publication of a piece published June 6th, 2016

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In Part I of the blog post on the scandal that has engulfed the country and billed by Jammeh as one of the most serious economic crimes in twenty-two years, we looked at the main agencies central to the corruption in addition to NAWEC, the national electricity company and biggest consumer of heavy fuel oil.

The Ministry of Petroleum is under the the Office of the President and thus subject to constant monitoring by Yaya Jammeh.  The Ministry of Energy has focused its attention on renewable energy while the Board of the GNPC oversees the upstream and downstream sub-sector operations of the Corporation.

Like everything else in a dictatorship, Jammeh has absolute control over every aspect of these agencies, including information flows.  Therefore, to act surprise with his "most serious economic crime in 22 years" announcement using both state-controlled television and the Daily Observer - his propaganda sheet - is pretentious behavior designed to prepare the groundwork so that others will take the entire fall for what Jammeh and his Lebanese and Gambian business associates should take a bigger share of the responsibility for the chaotic mess in the petroleum sector.

The initial organizational configuration of the petroleum sector comprised of Gam-Petroleum (Gambia) Ltd that has invested heavily in the Mandinari fuel depot to procure, store and sell petroleum and petroleum products to NAWEC.  Total International also procures and stores at the same depot for it's own operations.  The Ministry of Petroleum under the Office of the President is charge of the sector.

Mandinari Fuel Depot was built at the cost of US $50 million.  The facility considered a strategic infrastructure by the Jammeh regime was inaugurated in 2008.  Until the fuel depot was nationalized in March 2015, the equity share holdings looked like this: Social Security (31%), GPA (10%), GNPC (7%), Mohammed Bazzi (30.8%), Fadi Mazegi (10.3%), Amadou Samba (9.9%), Premier Investment Group (1%) *.  We are unable to say, for now, who the Premier Investment Group that own 1% of the fuel depot are.

It can be seen that 52% of this "strategic infrastructure" was controlled by private/foreign interests for over six years.  The private businessmen namely Mohammed Bazzi, Fadi Mazegi, Amadou Samba and PIG, together, had controlling shares from the inception with little effort to force them to divest until forced by circumstances beyond the regime's control which will be the subject we intend to address in our next installment.
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* Premier Investment Group is listed as owned by Mohammed Bazzi and Fado Mazeggi

Part III will look at the hows and  whys Jammeh arrived at the new share structure, the cost to the public treasury and why we think the Gambian people got the short end of the stick as a result of the exuberant cost of the "nationalization" of the Gam-Petroleum Fuel Depot.    

State-sponsored corruption at the Gambia National Petroleum Corporation - Part 1

The  conjunction with the Commission of Inquiry into the illicit wealth of Yaya Jammeh and his business cronies and to help our esteemed readers fully appreciate the proceedings, we are republishing our four-part series about GNPC, its share structure and the key players in a sector that has been kept a secret from Gambians by Jammeh and his business partners.

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A week ago, in a highly unusual move by Jammeh regime that raised a lot of eyebrows, the news reader of the government controlled national television read a press release informing the general public that the Office of the President has discovered "one of the most serious economic crimes in government during the past twenty-two years" of the Jammeh regime.

The release characterized the nature of the crimes committed as being related to the procurement of petroleum that involved personnel at the Ministry of Petroleum, Gambia National Petroleum Corporation (GNPC) and Board of the GNPC.

Because it is out of character for the regime to make such public pronouncements, it raised immediate suspicions when ten senior officials - past and current -  including a former Minister of Petroleum and Chairman of the GNPC were rounded up and speedily arraigned at the Banjul Magistrate Court in less than 48 hours.  It is important to note that even though the ten have been arraigned, the charges against each have neither been specified - at least, not publicly - nor the amounts involved.

A short historical context is essential to appreciate the problem.  Gambia National Petroleum Corporation was created in 2014 to take over the Gambia National Petroleum Company Limited established in 2003.  In presenting the Bill creating the Corporation, Infrastructure Minister, Balla Jahumpa, on behalf of the Vice President Njie-Saidy, said the GNPC Ltd. was created "to serve as the business arm of the government in the oil and gas industry in The Gambia."

The Gam-Petroleum Storage Facility at Mandinari was inaugurated in May 2008 to address the petroleum storage problems the Gambia faced over the years.  The country had outgrown the only facility owned and operated by Shell company Company (Gambia) Limited located in Banjul.

The new facility at Mandinari is listed as part of the Spectrum Group headed by Muhammed Bazzi, Jammeh's business partner and operator of the Brikama electricity power plant. The Mandinari facility, according to official sources, was build at a cost of US $ 50 million.  Initially, equity was split between the Gam-Petroleum holding group, Total International and Gambian and European banks with Total International designated as the exclusive supplier of petroleum products to the facility.

The storage capacity which is now billed as the sub-region's largest largest oil and gas storage container facility is 51,000 metric tons of heavy and light oils as well as LPG.  The facility is expected to eventually serve as a refueling stop and bunkering hub for vessels en route to South Africa and South America.
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Part II will look at the evolving share/ownership structures of these so-called state-owned petroleum companies, the procurement, storage and petroleum retailing practises that led to the massive loss of equity and revenue to the State.  It is inconceivable to think that Jammeh is not part of the scheme. 

US$ 900M is no '"chicken change", Amadou Samba owes Gambians an explanation

AMASA Holding Ltd. registered in China 

The Panama Papers listed $ 900 million against the name of a company named AMASA Holding Ltd. owned by Amadou Samba.  Two addresses were shown to be the home of the company -  78 Atlantic Road, Fajara, The Gambia and  No. 103 Ezian, Wanxin Village, Waxi City, in Wuxi City, Jiang Su Province, People's Republic of China.

$ 900 million, almost $1 billion is no 'chicken change' (a favorite Jammeh lingo) by any standard, including American.  By Gambian standard, the amount is obscenely humongous for a country as dirt poor as ours.

Rather than making threatening phone calls, spewing insults and renting "journalists" to defend the indefensible, Amadou Samba owe it to Gambians to explain the origins of the nearly $ 1 billion that pass through his Panama-operated off-shore account , how and to whom were these sums disbursed to.   Renovating and selling properties in Kensington and peddling fishing licenses cannot account for a million dollar, much less a billion.

What we do know, up to this point, that we are in a position to disclose is that both Amasa Holdings Ltd. and the off-shore accounts in Panama are non-operational but not before almost $ 1 billion of bank transactions went through the account in Panama.

Amadou Samba and the man he 'managed' 

What Gambians and authorities around the world would like to know is the origins of these funds and to whom were they disbursed.  All of it cannot be proceeds from companies owned by Amadou Samba.  He never owned and operated companies that generated a billion dollar revenue stream.

We have seen, very early in the Commission sittings, the numerous schemes hatched by Yaya Jammeh and his enablers with the primary aim of siphoning off public funds meant for development assistance.  These funds, once schemed off the top, find their way into local commercial banks and other destinations.

Until the alarm bells were sounded by the former Senegalese Minister of the Environment, Ali El Haidar, Yaya Jammeh was illegally exploiting Senegalese timber from the Casamance region at a rate that, according to experts, Senegalese forest cover may be depleted in two years because of the unsustainable rate of exploitation.  According to estimate,  The Gambia earned $ 238.5 million in timber exports mainly to the People's Republic of China.  Gambia was second only to Nigeria in redwood timber exports when Gambia has approximate 2% of forest cover confirming that these timbers were coming from Casamance.

Gambians demand to know who benefited from these operations and where's the money?  Westwood Company Ltd. has been prominently featured by some Senegalese authorities and identified as an active partner of Jammeh in the exploitation of the redwood.   The petroleum sub-sector demand special attention that requires external (legal) assistance in piecing together the numerous contracts entered into with African Petroleum and others to protect the interest of the Gambian people against unscrupulous con-artists who pose as legitimate businessmen.

There are other known international illicit trade in arms and ammunition, drugs (mainly cocaine) and human trafficking.  The Gambia had become the hub for these illicit trade during Jammeh's 22-year dictatorship.  Illicit and private mining conducted under the cloak of secrecy provides the Commission with a wide range of possibilities to uncover more of Jammeh's secrets that could not have been possible without the active participation of civil servants and businessmen and women of all hue and nationalities.

Gambia will not seek extradition of Ousman Sonko from Switzerland, says Justice Minister

Responding to journalists questions regarding the fate of former Interior Minister, Ousman Sonko, one of Yaya Jammeh's most powerful and trusted member of his ousted regime, Gambia's current Justice Minister revealed that the Barrow administration has no desire to pursue the extradition route.  

Instead, his government will cooperate with the Swiss authorities in furtherance of the legal charges that the notorious Ousman Sonko who referred himself as "Yaya Jammeh's disciple" or "Baye Faal" may likely face in Switzerland where he was intending to seek asylum only to be arrested for alleged human rights violations during the 22-year dictatorship of Jammeh.

Ousman Sonko was arrested following a formal complaint by Trial International, a Geneva-based non-governmental organization. that alleged that as Interior Minister and a senior member of Jammeh's security establishment,  he took part in the arrest, torture, rape and disappearances of citizens.

In March, the Gambian Interior Minister announced government's intention to seek his extradition to The Gambia to face trial.  The change in strategy may have been necessitated by the overwhelming demand on the Gambian judiciary - the aftereffect of the defeat of 22-year dictatorship -  that is understaffed and thus facing capacity issues that its shares with the rest of the civil service.  I

It, therefore, makes sense to let the Swiss authorities have a first crack at the case.  If Ousman Sonko is found guilty and sentenced to a prison term, he's expected to serve it in a Swiss prison before being deported to his native Gambia.  However, in the event he's found innocent - an unlikely outcome given the overwhelming evidence against him -  it is unclear what would happen.  He could be deported to The Gambia, returned to Spain to face deportation hearings as his initial port of entry into the EU.  We will continue to monitor developments.

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Correction:  We may have implied in our previous reporting on the Ousman Sonko's case that there was no extradition treaty between Gambia and Switzerland.  If we did imply it, we'd like to correct ourselves.  There is indeed a treaty between the two countries.  Our sources in Switzerland have confirmed it.