Washington, D.C.,/ Toamasina, Madagascar, May 26, 2005 —
The International Finance Corporation, the private sector arm of the World Bank Group, announced today that the government of Madagascar has selected a private operator for the container terminal at the port of Toamasina, the island country’s main port. This transaction is the result of the reform process that the government of Madagascar initiated three years ago with the support of the World Bank, which has been a key in developing a sustainable transport sector strategy in the country.
The winning bidder, International Container Terminal Services Inc. (ICTSI) of the Philippines, was selected through a highly-competitive and transparent bidding process from a group of prequalified bidders, including AP Moller Finance, Hutchison Port Holdings, ICTSI, and the consortium of Malta Freeport – CMA CGM-Bolloré – all of them world-class port operators.
The winning bid was selected on a single transparent financial criterion consisting of the highest royalty fee per 20-foot container handled. ICTSI will enter into a 20-year concession for the operation, management, financing, rehabilitation, and development of the container terminal on a PPP (public-private partnership) basis.
Currently, the port of Toamasina accounts for over 90 percent of all container traffic in Madagascar. The concession documents specify the obligations and risks that will be shared between the private operator and the newly-established landlord port authority of Toamasina, the Société de gestion du Port Autonome de Toamasina. During the life of the concession, it is estimated that over $300 million will be mobilized from the operations of the container terminal in the form of concession fees, royalties, and investments.
Madagascar’s Minister of Public Works and Transport, Mr. Roland Randriamampionona, expressed great satisfaction with the outcome of the bidding process. He said, “By partnering with ICTSI, Madagascar will benefit from the integration of capital, management expertise, and international best practice to ensure the development of the container terminal of Toamasina. With this partnership, the government also wishes to ensure that Toamasina becomes a key port in the Indian Ocean on the crossroads of Africa and Asia.”
Mr. James Bond, World Bank Country Director for the region stated, “The successful closing of this transaction is the result of the reform efforts of the government of Madagascar and its strong belief in private sector participation in the delivery of key infrastructure services.”
Mr. Bernard Sheahan, Director of IFC’s Advisory Services Department, responded, “We are very pleased to be part of the process and thank the government of Madagascar for its trust in IFC.” He added, “We hope this transaction will lead to sustainable investment in the country and contribute significantly to capacity building and technology transfer. The fact that a Philippine company was selected in the bidding process makes this transaction another landmark in south-south cooperation.”
According to Mr. Richard Ranken, IFC Director for Sub-Saharan Africa, “IFC’s participation is part of our commitment to strengthen the private sector in Madagascar. I am also delighted that the bidding process attracted the interest of leading port operators, thereby demonstrating that Madagascar could become an important investment destination.”
This transaction represents IFC’s eighth successful advisory transaction in Sub-Saharan Africa in the past ten years, including Kenya Airways, Uganda Telecommunications, Gabon Water and Electricity, Cameroon Electricity, South Africa National Parks, Air Tanzania, and the Moatize Coal Mine in Mozambique.
In structuring this transaction, IFC benefited from the donor support of DevCo, a multi-donor facility supported by the UK’s Department for International Development, the Dutch Ministry of Foreign Affairs, and the Swedish International Development Agency, as well as support from the Private Infrastructure Development Group's (PIDG) Technical Assistance Fund. DevCo and PIDG have been established to support private infrastructure investment contributing to growth and poverty reduction in developing countries.
IFC’s Advisory Services Department (
http://www.ifc.org/ifcext/psa.nsf/Content/home)
provides advisory assistance, primarily to governments, on private sector participation in the provision of infrastructure services. The services help establish public-private partnerships through which governments can bridge the need for increased services under budget constraints with the benefits of private sector expertise, management, and finance.
The mission of IFC (
www.ifc.org
) is to promote sustainable private sector investment in developing countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. Since its founding in 1956, IFC has committed more than $44 billion of its own funds and arranged $23 billion in syndications for 3,143 companies in 140 developing countries. IFC’s committed portfolio at the end of FY04 was $17.9 billion, with an additional $5.5 billion held for participants in loan syndications.
