In brief
- Most major contracts signed by Somalia's government in the two years before February 2015 were not tendered competitively, according to a confidential Finance Governance Committee report obtained by Reuters and reported by Wardheer News.
- The committee recommended scrapping or renegotiating several contracts, including a patrol boat deal with AMO Shipping and management of Mogadishu port and airport.
- Somali officials said the government welcomed the findings, but the report does not establish what actions were taken after February 2015.
On 18 February 2015, Wardheer News reported that a donor-backed committee had found most major contracts signed by Somalia's government in the previous two years were not tendered competitively. The report, citing a confidential Finance Governance Committee (FGC) report obtained by Reuters, said the committee recommended those contracts be renegotiated or scrapped.
The FGC had six members, three chosen by the World Bank, International Monetary Fund and African Development Bank, and three chosen by the government. It was formed after donors voiced frustration at the handling of public funds, according to Wardheer News.
Among the contracts flagged was a deal with AMO Shipping Company Ltd signed on 29 July 2013 to supply six patrol boats for 132 million euros ($150 million). The committee recommended scrapping that contract, Wardheer News reported, citing the FGC recommendation.
The committee also criticised a contract signed on 25 July 2013 with Somalia FishGuard Ltd, a Mauritius-registered company run by former British soldiers, giving it responsibility for selling fishing licences and conserving fisheries resources. Wardheer News reported the FGC criticism.
The FGC suggested the government renegotiate contracts with Turkish firms that run Mogadishu's port and airport, the government's main sources of revenue, according to Wardheer News.
A separate contract awarded to U.S. law firm Shulman Rogers to recover frozen Somali state assets was scrapped, but that was not one of the 11 contracts the FGC reviewed, Wardheer News reported.
Former Somali Finance Minister Hussein Halane said in a letter dated 20 October 2014 to the FGC that the government and Favori had agreed to renegotiate, according to Wardheer News, citing the letter seen by Reuters.
State Minister for Finance Abdullahi Mohamed Noor said the government welcomed the FGC findings and would act on recommendations. "It's in the interests of the Somali people to do these kinds of amendments," he told Reuters, as reported by Wardheer News.
The report did not establish what happened to the contracts after February 2015. It is unclear whether any were renegotiated, scrapped, or left unchanged. The source only says nine of the 11 contracts were reviewed, leaving two unaccounted for without explanation. The dollar conversion for the AMO Shipping contract is from the source and unverified.
Frequently asked questions
Which contracts were questioned by the Finance Governance Committee?
The FGC report cited by Wardheer News flagged contracts with AMO Shipping, Somalia FishGuard Ltd, Turkish firms running Mogadishu port and airport, and others as not tendered competitively.
What was the Somali government's response?
State Minister for Finance Abdullahi Mohamed Noor said the government welcomed the FGC findings and would act on recommendations, as reported by Wardheer News.
Did the FGC report lead to any contract cancellations?
The only documented cancellation was a prior contract with Shulman Rogers, which was not part of the 11 contracts the FGC reviewed. The report does not establish what happened to the other contracts after February 2015.