Archive for February, 2011

Stop Press / Breaking News – Gadaffi’s companies in Africa face uncertain future, may be subject to asset freezes too


Concerns are growing amongst management and staff of Libyan owned companies like LAICO Hotels and Uganda Telecom about their future and their biggest shareholder’s ability to inject further capital into the companies for expansion, modernization and system upgrades.

LAICO Hotels for instance owns the Lake Victoria Hotel in Entebbe, but also the prestigious Grand Regency Hotel in Nairobi, which is located along the Uhuru Highway and was in the negative headlines for weeks at end when it was ‘sold’ at an alleged throw away price to Gadaffi’s Libya in turn for a range of ‘considerations’. Another major hotel in the region is their Umumbano Hotel in Kigali.

All these properties, while formally owned by LAICO Hotels, were always presented to the public, and many of the staff support this notion, as ‘Gadaffi’s properties’ and the current standing of this ‘owner’ – considering all the global sanctions, frozen bank accounts and even asset freezes – are making staff sentiments run riot, with rumours abound over the future of these hotels.

It is understood that operations have at this stage not been affected, but should the global freeze of Gadaffi controlled companies be extended to include these hotels, it could have a series of rather negative consequences, both in the legal sense as well as for the financial side of the companies.

It is no wonder therefore that management and staff of these companies are monitoring the developments in Libya therefore with growing concern, wondering how safe their own, especially senior positions are, if their salaries are being paid at the end of the month and the months to come and who will be ‘in charge’ in the future as at least some board member positions are held by Gadaffi cronies who may find themselves being embargoed too as much of the dictators inner circle now has their assets frozen abroad and travel bans imposed on them.

Libya, or should one say Gadaffi, has become a major investor in East Africa over recent years, where ‘opportunities’ were snapped up regularly, often without competitive bidding more as a political favour – something which most likely is now no longer the case and more and more of his ‘friends’ are turning their back on him, just as they would when the proverbial tycoon goes broke.

It is understood that the UN is putting a panel together to oversee the freeze of assets, of bank accounts operated by Gadaffi’s family and cronies and whom to extend travel bans to, making it a period of anxiety for all those working for such companies, in Africa and around the world, until the positions of such firms have been clarified by a sanction committee.

Watch this space as the latest saga involving Libya unfolds.

Stop press – Breaking News – Kenyans home from Libya, Ugandans on next flight to Entebbe



The Kenyan contingent on the Kenya Airways special flight KQ 1322 were given a tumultuous welcome by relatives and friends, when the KQ B767-300 touched down at Nairobi’s Jomo Kenyatta International Airport a short while ago.

Unlike many others rescued by the same mission, who will now make their way home on Kenya Airways’ connecting flights to Entebbe, Dar es Salaam, Kigali, Bujumbura and Johannesburg they had completed their homebound journey and, according to an eyewitness from JKIA, expressed their relief and gratitude to be back home safely. The Kenyan government, through their embassy in Tripoli, joined by fellow East African diplomats also accredited to Libya, made the ground arrangements in Tripoli to get as many East Africans to the airport there as was possible, while Kenya Airways did all the flight planning and logistics – a major challenges as it turned out in the end, considering they were flying into a virtual civil was zone.

Yet, inspite of setbacks and disappointing delays, the flight was eventually able to leave Tripoli, then stopped in Cairo to give the crew their required rest time – they were first on standby to take off to Libya and then sat on the ground for an extended period of time – before the aircraft left Egypt in the early hours of today and returned to Nairobi.

As to Ugandans on board, they too can expect a hero’s welcome in Entebbe, when they get home later in the morning, equally happy to have escaped with their lives and the few bits and pieces they managed to carry with them, when abandoning their work places in Libya and running for their dear life, before Tripoli too degenerates further into street fighting.

Again, compliments to all involved to bring this rescue mission about and to Kenya Airways’ crew and management for their defiance to succeed in the face of many problems.

Stop Press Update – Libya evacuees from East Africa now in Cairo


151 passengers were airlifted out of Tripoli last night under what has been described as ‘chaotic circumstances’, with navigation, ground handling and check in suffering from the political upheavals now witnessed across much of Libya. The mercy flight, which was initially due to take off from Tripoli for Nairobi at 17.30 hrs EAT only managed to get off the ground at 03.00 hrs this morning, and then landed in Cairo a few hours later where the crew had to take their mandatory crew rest, having literally ran out of duty hours permitted for a flight. The airline initially expected more passengers, but it appears that not all were able to safely reach the airport in the face of sporadic fighting and the outbreak of violence within Tripoli and its surrounding areas, and may have judged it safer to stay put for the time being instead of risking the probably hazardous journey to the main international airport.

All passengers, from Kenya and many other East and Southern African countries, were put up in the transit lounge where they are being provided with blankets, food and other amenities while awaiting their onward journey back home. They were not allowed by Egyptian authorities to leave the airport and therefore had to stay put. The aircraft, a B767-300, is now expected to touch down in Nairobi at 06.30 hrs on Monday morning to the undoubtedly emotional welcome by family members and friends able to receive their loved ones back unharmed and safe.

Full compliments to the crew of the flight who bravely flew into what can only be described as a civil war zone and brought their fellow citizens and many others from East Africa, Southern Africa and even West Africa to safety.

Well done and Asante Sana!

Breaking News – Egypt’s thoughts on the Nile waters laid bare by WikiLeaks


The government of fallen ‘Pharaoh’ Hosni Mubarak has now finally been exposed by more WikiLeaks cables published last week, confirming what East African countries for long suspected and what a Ugandan diplomat a few weeks ago ‘spilled’ – reported here at the time: Egypt did consider the use of force against the ‘water producing countries’ upstream, should push come to shove over what Cairo thought was ‘excessive use of lake and river waters for agri-irrigation, domestic consumption and industrial use’.

The pre-independence agreements signed by a biased Britain with Egypt in 1929 and in 1959 gave the Egyptians literally veto rights over the use of the Nile waters and sources upstream, affecting the ‘producer’ countries of Uganda, Kenya, Tanzania, Rwanda, Burundi, Congo DR, Ethiopia – where the so called Blue Nile springs from – and of late even the soon to be independent Republic of South Sudan.

A hydrologist, under diplomatic cover provided by the Egyptian Embassy in Kampala, is permanently based in Jinja to monitor the release volume of water for the present Owen Falls and Kiira power stations and his ‘instructions’ are to be followed or else, the latter never fully explored nor exercised in the past under Mubarak.

Hence, Egyptian and Khartoum regime representatives at the Nile Basin Initiative and the negotiating teams over a new Nile Water Treaty proposed by the Eastern African states, kept their East African counterparts often in near desperation, after refusing to engage in honest negotiations over what East Africa considers a prime natural resource, to be shared with neighbours within reason but not under dictates and threats. In fact Tanzania has for all practical purposes already thrown the old treaties out of the diplomatic windows, saying in unison with her neighbours in East Africa that those were shoved down their throats by the British on independence, are outdated and no longer reflect the grown populations in Eastern Africa nor the changes in climatic conditions since 52 years ago.

Said one regular source: ‘I have told you often what our effort aims for. We wish to renegotiate the old treaties and when Egypt and Khartoum walked off the negotiating table we were compelled to put up the treaty for signature and adoption without their final input. It is a fact that most of the water producers as you call us have signed on to the treaty already and it is now up to the new government in Egypt and the regime in Khartoum to do the same. [Burundi and Congo DR too still have to sign] We believe our position will be endorsed also by the new Republic of South Sudan in full, as they too fall into your producer category while those two downstream are in your words ‘consumer countries’. We believe our new treaty is fair, it recognizes Egypt’s needs for water and guarantees a quota for them. What they also have to do, like the Khartoum government, they have to begin using other sources for their potable water like desalination, better recycling and so forth, but even us here are conserving water now more and more to stand the storm of climate change.’ Responding to another question the same source then added: ‘I know you keep pointing at Boutros Boutros Ghali’s utterance back in the 70’s that Egypts’ next war would be over water, but why would they attack us over water. They cannot think to win a long distance war and are therefore well advised to consider their options very carefully. If they want to be partners we are ready for them to be partners also, if they want to be something else we are ready for that too. The WikiLeaks documents you are referring to I have not seen but we rely on our own assessments, the feedback from  our diplomatic staff in Cairo and Khartoum, private exchanges within the delegations and we can figure out what it is they say and what it is they think. We are not novices in this business, not like on independence when the British almost forced those treaties on us as part of finally giving us independence. Today we operate as Uganda within our East African framework and our fellow member states are also clear in their interpretation as are we. The five member states, plus Congo, South Sudan, we are seeking to use our own resources within our own needs and development programmes. Irrigation for agriculture is almost a must now considering the cycle of droughts parts of East Africa undergo. Increased industrialisation too requires more water and with the population growth in East Africa we must provide more water for domestic uses. Yet we are offering good terms for the use of our water and Egypt in particular, considering their problems right now are only temporary and any new government will have to engage with us, is better off being a friendly partner with us. They are in COMESA, we are in COMESA too, so there are platforms we can use o talk and see a new treaty come through’.

Adds this correspondent that this matter has been pending since the 1999 formation of the Nile Basin Initiative and it is hoped that a final agreement can be reached with a new government in Cairo soon to jointly look forward in the spirit of cooperation and development especially considering the rather generous offer made by the ‘producer countries’ in favour of the ‘consumer countries’ downstream.

Watch this space to learn about yet more twists and turns in this story line.

News update – Kenya plans two tier strategy to sell off hotel, lodge and resort shareholdings


Information from Nairobi about the upcoming sale of shares in hotels, lodges and resorts, held by the Kenya Tourist Development Corporation on behalf of the Kenyan government, talks of a two tier strategy in selling off these holdings, or as it appears turning some of them into a joint venture with a key investor – yet to be found though.

The shares held in the companies owning the Intercontinental Hotel, the Hilton Hotel, the Ark and the Mountain Lodge, are reportedly being offered to the respective financial partners in these ventures on a ‘first right of refusal’ basis, which will give such companies as Serena Hotels – in the case of the Mountain Lodge – and Fairmont Kenya – in the case of the Ark – the option to buy out the government shares. The same applies to leading city business hotels Intercontinental and Hilton, where existing shareholders in theses companies will be able to exercise their prerogative to buy these shares.

However, other hotels and lodges appear to be in a more precarious situation, as they are run down but yet form part of a group of properties developed by government with the intent of providing such services for the locations they were built in.

Those properties, government in Nairobi now thinks, should be ‘pooled’ as a going concern and ‘circuit’ and may include both better known prime choices like Ngulia and Voi Safari Lodges and the Mombasa Beach Hotel – presently known as Kenya Safari Lodges and Hotels – but also the ‘lesser’ properties like Mt. Elgon Lodge near Kitale, the Golf Hotel in Kakamega, the Sunset Hotel in Kisumu and the Kabarnet Hotel. Here the option now explored would be to find a majority shareholder taking 51 percent in a joint venture with government’s KTDC to ensure that some of the ‘lesser’ properties are not turned to different uses, which would deprive the respective locations of a hospitality business.

Much will depend however on how these properties are being valued, as in present market conditions investors will pay fair value but not over the top, considering that most of these units will require massive investments in modernization and refurbishments before they can meet the level of standards for instance set by Serena Hotels, Fairmont, Sarova and others. Leaving the refurbishment however to KTDC, another idea apparently being considered, might put a potential investor off as this might not meet with the expectations of quality work they might have in mind and further considering that government really has no place in business these days, this being arguably better done by the private sector.

Caution has therefore been voiced not to spend tens of millions of US Dollars in such refurbishments before entering into a joint venture and to leave that to the new partnership after it has been formed with competent hospitality operators cum investors. Watch this space.

Stop Press – Breaking News – Kenya Airways mercy flight to Tripoli underway


Information just received gives an update of the planned Kenya Airways evacuation flight, operated on a wide body B767-300 from Nairobi via Cairo to Tripoli this afternoon.

The Libyan Civil Aviation Authority eventually did grant a landing permit on humanitarian grounds, as the aircraft was already sitting at Cairo’s International Airport working out the final logistics. As many as 68 Kenyan citizens will be airlifted back home and the remainder of the seats has been given to nationals of Uganda, Tanzania, Rwanda, Burundi, South Sudan and Congo DR. South African and Lesotho nationals, plus a few from Sierra Leone in West Africa, will also fly to safety, leaving the present chaotic circumstances of fighting, looting and a general breakdown in law and order behind.

Kenya Airways did confirm that the aircraft will be operated with a crew of 11, an extra engineer in case of technical issues arising – this is a standard precaution when operating such a flight, and will take a total of 191 passengers on board. As this operation goes underway we wish Kenya Airways, and all the crew and passengers God’s Speed, safe landings and a happy reunion with their distraught families in Kenya and the region.

Kenya Airways has been working to put this special flight operation into action over the past days but communication and other factors have delayed the flight until this afternoon.

KQ has to be commended for their extraordinary effort, to coordinate the rescue mission with the diplomatic representatives in Nairobi and Tripoli of the countries whose citizens are being flown out of Libya today, fully living up to their other name ‘the Pride of Africa’ – hence a big Asante Sana to KQ!

News Update – Kenya keeps Visa fee low


The Kenyan government, according to a well placed source in Nairobi, is set to keep the fees for a tourist Visa at 25 US Dollars per person, and will only review this by July 2011. The savings, for instance for a family of four, runs into 100 US Dollars, money tourists then spend in restaurants, curio shops or on excursions, spreading money directly into the Kenyan economy rather than collecting it at entry and being kept by government.

The other East African countries other than Rwanda, where notably many nationalities are exempt from paying for Visa – thus contributing to the fast rising demand for tourism in this country in recent years – continue to charge 50 US Dollars, making holidays there more expensive.

The long advocated for common East African Visa has still not gone beyond the planning stages, a pathetic state of affairs considering the idea was floated [incidentally by this correspondent] at an EAC Committee meeting on tourism and wildlife back in 2002 and been ‘welcomed’ – not too welcome though for some who continue to delay and obstruct this crucial element in making tourist visits to the entire region ‘easier and cheaper’.

It has also been ascertained that both envy as well as anger is extended towards Kenya over this decision by her neighbours, where in particular immigration officials talk of ‘undercutting’ instead of considering joining hands in lowering ‘entrance fees’ in line with Kenya and finally agreeing on a common Visa and its administration.

But until at least July it is ‘Karibuni Kenya’ at ‘half the entrance fee’.

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