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Djibouti : Building Brand Bin Laden
Will the tiny nation of Djibouti one day be the “ Dubai of Africa ,” host to the largest suspension bridge in the world? Sheikh Tarek bin Laden, along with an alliance of international investors and some $200 billion in capital, hopes so.
Djibouti's government seems ready to hand the keys over to Al Noor Holding.
By Jeff Neumann
Saturday, September 13, 2008
Inside a half-finished five-star hotel in Djibouti this past July, several hundred foreign dignitaries, investors and journalists gathered for the first look at an ambitious plan to unite two continents. Dubai-based Al Noor Holding Investment Company hopes to build a bridge between Africa and the Arabian Peninsula . But not just any bridge: Spanning 29 kilometers of the Red Sea between Djibouti and Yemen, it will be the world's largest suspension structure, at points boasting 800-meter pilings and anchored at each side by brand new cities bearing the same name: Al Noor City, or City of Light.
The estimated cost of the whole venture is somewhere around $200 billion (LE 1.06 trillion).
The visionary behind the project, Tarek bin Laden, the Saudi oligarch and half-brother of the notorious Osama, hopes in 15 to 20 years time to see his dream of the bridge and both cities become reality. But just how realistic is it?
Perhaps Djibouti 's only real asset today is its location at the junction of the Red Sea and the Gulf of Aden . It has one of Africa's smallest populations, estimated at around 500,000, and its land size is comparable to Massachusetts in the United States . It is also bordered by Ethiopia , Eritrea and Somalia — three nations that are embroiled in multiple conflicts and whose names have long generated images of famine, despotism and anarchy.
Along the road between Djibouti-Ambouli Airport and the hotel hosting the project launch, people wandered between single-story concrete buildings and shacks — some carried jerry cans or bundles of sticks, but most walked empty-handed. Less than a kilometer away from the five-star hotel, a naked child squatted beside a wall while groups of shirtless men slept in ditches beneath the shade of trees.
The “Bridge of the Horn” is to have a six-lane highway and light rail lines for passenger and commercial traffic, with the goal of one day handling 100,000 cars and 20,000 rail passengers per day. There are also plans for a natural gas pipeline to run the length of the bridge from Djibouti into Yemen and on to the Gulf.
If completed, the bridge will cross the aptly named Bab El-Mandeb, the Gateway of Tears. It is the shortest point between Yemen and Djibouti and is named after the treacherous waters made famous from centuries of taking ships and lives. There is also the deadly threat of Somali pirates operating in the area, enough to warrant the permanent basing of an international pirate task force and several thousand French Foreign Legion and US military troops. Europe 's supply of oil from the Gulf passes through these straits, making security here all the more vital.
And just as the Suez Canal controls sea traffic at the northern end of the Red Sea , the Gateway of Tears owns the shipping lanes of the south. Not far from the hotel there is a sight common to every port city from Buenos Aires to Shanghai : shipping containers. Stacked like a multi-colored set of Legos, rows of metal boxes waiting to be filled with goods, loaded onto ships and sent out across the globe.
This is the Horn of Africa.
A Bridge to
Guests at the launch were given a video presentation in the main ballroom and later held roundtable discussions with designers, financers and project management teams. The conference was held to entice those with deep pockets and even deeper ambition to get in on one of the twenty-first century's boldest schemes to date. Bin Laden's Al Noor Holding has already pledged to invest an initial $1 billion (LE 53 billion) and more cash will surely follow as other investors fall in line.
Speaking on behalf of Al Noor Holding to open the ceremony was the company's CEO, Mohammad Ahmed Al-Ahmed. He compared the new city in Djibouti to Singapore , Hong Kong and Dubai , adding that “They have done it, so can we.”
Computer-generated images of the city and bridge flashed across the screen as guests flipped through booklets packed with photographs of construction sites, smiling children in classrooms, golf courses and skyscrapers. Providing commentary with the images, Al-Ahmed used words including “courage” and “good intentions.” Referring to the vast revenues that Al Noor City will hopefully one day bring in, he said, “That money will be for everybody.”
The video referred to Djibouti as “the dreamland.” Alternating between French and English, Michel Vachon, senior vice president of L3 Communications, a US-based defense contractor that is running project management for both cities and the bridge, spoke briefly to the crowd after Al-Ahmed. He promised success and pointed out his hopes of accommodating 100 million passengers at Djibouti Airport over the next 20 years.
The idea is for Al Noor City to cover some 1,000 square kilometers along the northern Djibouti coastline, in what is now no more than hardscrabble desert populated by camels and nomadic herders. During a lunch break, guests crowded around a light-up model at 1/30,000 scale, which showed that the city will be divided into two parts: one for commerce and business related activities — including a deepwater port and rail links — and the other for residential and leisure facilities. It is here that Al Noor Holding envisions the birth of “a brand name for Africa .”
One section of town, called Wisdom City , will house schools, a world-class shipping port and free-trade zones. Then there will be Leisure City with resorts, boutique hotels, residential blocks and a yacht club, while the bridge will land roughly in the middle of the two areas. The glimpse of Djibouti I had just seen out on the road might as well have been a different planet.
The video showed a high-tech, prosperous society where the destitute Horn of Africa once existed. One aspect of bin Laden's grandiose vision would have upstart local entrepreneurs building on the periphery of the free zone and contributing to a flourishing Djiboutian economy. As the narrator on the video reminded viewers, “It's not about what's here today, but what can be here tomorrow.”
However, the simple question of “Where does the bridge go?” remains.
Dean Kershaw, program manager at L3, acknowledges the dilemma: “You can't build something that doesn't go anywhere.” As the plans now show, the foot of the bridge would have passengers dropped off to nearby Ras Doumeira, an area where as recently as June, Djiboutian and Eritrean troops traded shots, claiming at least 12 lives.
Citing historical proof that many of the world's greatest cities sprouted up around bridges and other crossings, Michael Mann, senior vice president at L3, said, “You'll find that cities grow on both ends of the bridge. You change the whole dynamics of the region. Where do those roads come from? They come from some entrepreneur saying, ‘I'm going to build a factory here and I'm going to build this link to get out to this road.'”
But building that link would be virtually impossible today —there are less than 400 kilometers of paved roads in all of Djibouti .
The Alliance Raises Capital
If anyone were equipped to undertake such an endeavor it would be bin Laden and Al Noor Holding. As pioneers of Dubai 's rapid ascension to the world stage, Al Noor Holding's subsidiary, Middle East Development (MED), has been involved in some of the United Arab Emirates ' most visible and renowned development projects, including the Palm Islands and Dubailand.
Al Noor Holding and MED don't feel that financing the nearly $200 billion project will be an issue and are adamant that that investors will clamor for a shot at getting in on such a prestigious venture.
The first of three phases, or “tranches” (as Al Noor Holding refers to them), of investments will go to “critical infrastructure” — building roads, upgrading the existing port and laying the foundations for Al Noor City, Djibouti.
The project management office aims to complete its work within two years after framework agreements are in place with the Yemeni and Djiboutian governments. At this point, investors will be on board and significant construction will have already been well underway. A series of cash infusions and corporate guarantees will come in the second phase. The third and final phase of the fundraising side will be about “utilizing value” and raising capital through private equity firms.
As the worldwide scramble for natural resources gains urgency, Africa has become hotly contested ground between China and the West. The US military has been trying to establish a base on the continent for AFRICOM, the command and control nerve center for its Africa-based operations, since 2007. American and European companies have been extracting natural gas from Algeria and oil from Nigeria for decades. For its part, China has been striking lucrative oil drilling and mining deals in countries including Sudan , Angola and Zimbabwe in exchange for everything from the construction of schools and wells to the sale of guns and ammunition.
As a US-based defense contractor, L3 Communications is staffed by former military officers and has a board of directors that includes John M. Shalikashvili, the retired chairman of the Joint Chiefs of Staff of the US Armed Forces. Both Al-Ahmed and Vachon have in the past worked for DynCorp, one of the world's largest defense contractors whose missions have included everything from training national police in Liberia to running security operations at Baghdad International Airport and guarding Afghan President Hamid Karzai. It has also been subject to several US Congressional investigations and audits alleging fraud over government contracts in Iraq and Afghanistan .
Among the nearly 60 companies already in the so-called “Al Noor Alliance” are defense contractors such as Allied Defense Group, IAP and Lockheed Martin. Other partners like KBR (formerly Kellogg, Brown and Root) and Bechtel have been involved in nation building experiments from Bosnia to Iraq and Afghanistan . The alliance also includes several design firms, investment houses, public relations firms and multinational real estate developers.
As one journalist from Hong Kong pointed out during the press conference, there are no Chinese companies included in Al Noor Alliance. But Al Noor Holding says it is actively looking for investment partners with no discrimination against nationality, and it is hard to imagine that anyone with the right amount of money would be turned away.
Whether or not bin Laden will meet with the same success on the Horn of Africa as he has in the Gulf remains to be seen. Whereas the UAE and Saudi Arabia have vast amounts of oil reserves and established economies to support large-scale development projects, Djibouti has virtually no natural resources or other means to sustain itself. Bin Laden is hedging his bets that Djibouti can thrive on serving as an international shipping hub, with other world-class moneymaking industries following suit.
There Goes the Neighborhood
Our scripted tour was originally to include a stop in Yemen , the other side of the bridge and proposed site of Al Noor City, Yemen, but the government denied visa requests for unspecified reasons at the last minute. A few days prior to our scheduled arrival, a bomb attack struck Yemeni security forces in the eastern part of the country.
Yemen is notoriously secretive and is fighting an insurgency of Shi'ite Houthi rebels in the northern part of the country. The rebels are allegedly backed by Iran and are attempting to overthrow the authoritarian government. Travel outside of the capital Sana'a or the main port city of Aden is hampered by security checkpoints and foreigners are generally required to have a police escort away from the two cities.
Plans for Al Noor City, Yemen, state that the city will be even bigger than its sister in Djibouti , at 1,500 square kilometers. It is to have similar facilities but on an even bigger scale. Just off the coast of Yemen lies Perim, a 13 kilometer-long island that will serve as a land base for the bridge before continuing on the remaining stretch to Djibouti .
Back on the African continent, land-locked Ethiopia is wholly dependent on Djibouti for access to the Red Sea and its sea-borne trade due to the country's hostile relationship with its other neighbor, Eritrea — and the fact that Somalia's ports are in shambles and controlled by warlords. As a result, Ethiopian trucks and lorries must make a journey of around 800 kilometers from Djibouti 's port to Addis Ababa using decrepit roads through dangerous territory. Otherwise, the dilapidated Djibouti-Ethiopia Railway is used for commerce between Ethiopia 's capital and the Red Sea . Recently, DP World, a subsidiary of Dubai World, has been looking into resuscitating the ageing railway, as well as installing a new oil pipeline.
Djibouti 's prickly northern neighbor, Eritrea , has been unpredictable in recent years and has lashed out violently against both Ethiopia and Djibouti over various territorial claims. After a 30-year war, Eritrea gained independence from Ethiopia in 1993. The two countries again fought a series of running battles over a strip of sparsely populated desert that claimed some 70,000 lives between 1998 and 2000.
Somalia , the world's premier failed state, has been partially occupied by Ethiopian troops since ousting Islamist insurgents from power in January 2007. It has also been without a functioning government since 1991 and the current transitional government holds little sway outside of a handful of towns along the Ethiopian border.
In other words, Djibouti is wedged between some of the world's longest running, bloodiest conflicts and dangerously unpredictable neighbors — a region that at any given moment can explode.
If You Build It, They Will Come
While the plan for Al Noor City focuses on mundane details — like speed limits on certain highways, layouts for residential subdivisions and organic waste management — it lacks specifics on major issues, like sovereignty. With the city operating as a free-trade zone, Al Noor Holding will run civil governance, as opposed to the Djiboutian government.
Mann says that the city will be governed under the rule of law with “a focus on investors.” Here is Al Noor Holding's least-thought-out — and perhaps most important — aspect regarding the city it is hoping to create. With a target population of 2.7 million by the time the city is complete, having concrete plans for governance is essential.
Construction will begin in “base cities” — camps for workers living in modular units that will, in theory, serve as the basis for civil society in Al Noor City. A project of this size requires an incredibly large workforce, well over one million workers of various skill levels. Asked where that workforce will come from, Kershaw said, “Well, certainly we're looking at the local economy as much as possible. But it's going to come from the world. Face it: We're building a city in Djibouti , [a country] that has an entire population of what? 700,000?”
According to Kershaw, these “base cities” will serve a dual purpose as a center for construction operations and a place where the Al Noor cities can “grow [their] own bureaucrats that work within the city structure.”
“Is it actionable, can it be done? The answer is ‘yes,'” says Kershaw. Bin Laden has said one major reason for building the bridge is so African Muslims can more easily make the Hajj pilgrimage to Mecca . Today, if they can afford it, travelers must make the arduous journey across the Gateway of Tears or through Egypt and by ferry across the Red Sea to Jeddah.
An acute shortage of arable land on the Arabian Peninsula may also be one reason for constructing the Bridge of the Horn. Africa has large swaths of uncultivated land that are suitable for growing agricultural products. But the ability to quickly transport produce from the hinterlands of Africa to Al Noor City and the Gulf is decades away, as reliable rail and road infrastructure is all but non-existent for thousands of miles in each direction.
There is no doubt Djibouti is seen as a foothold on a continent rich in oil, natural gas, diamonds, coal and timber. Africa 's history is marred by hundreds of years of foreign powers claiming territory to extract these precious commodities and the twenty-first century has so far been no different. Recent wars have been fought over control of diamond mines and oil pipelines.
With Gulf countries rapidly moving away from oil-based economies, companies like Al Noor Holding and MED are stepping in with large-scale development projects promising cities of the future. The race is on in Africa .
“This is a noble experiment,” said Kershaw, adding, “Sheikh Tarek has a vision. It creates a whole legacy for him.” Bin Laden did not speak during the launch or to journalists, but he watched the presentation at the side of Djiboutian Prime Minister Mohamed Dileita Dileita. So far, the Bridge of the Horn and Al Noor Cities projects have the full blessing of the Djiboutian government, but whether or not the Yemenis are fully compliant remains unclear.
There are significant hurdles to overcome before bin Laden's dream can come to life. Details like sovereignty, regional and local security, funding and infrastructure all must be handled before major steps on the construction side can take place. Attracting new investors and keeping the governments of Djibouti and Yemen satisfied throughout the process will ultimately hinge on all of these elements coming together.
Djibouti today is little more than an African port town surrounded by barren land, hunger and war. On a street corner near the airport is Fun City , an abandoned amusement park. At a small beach near the port, dozens of children swim, splashing each other and waving excitedly as our motorcade passes, while a man sitting on a milk crate gives us the finger. As we waited for our flight to take off, the only other aircraft on the tarmac were US military cargo planes and helicopters, some fighter jets tucked under hangars and an Air Finland passenger jet. It takes a wild imagination to see this place one day handling as many travelers as Dubai International Airport , or for the streets to have an electric-powered commuter rail and high-end shopping malls.
Executives from Al Noor and L3 are brimming with confidence as the project enters its first phase of garnering funds and support. And they should be, because realizing bin Laden's bold dream depends on it. Vachon closed his opening remarks of the conference by saying, “I may not be a prophet, but I can make a prophecy: Al Noor City will exist.”
Source: bt, Sept 13, 2008