Wednesday August 28, 2024
FILE - A cargo ship docked at Mogadishu Port, managed by Turkish firm Al-Bayrak, which has been accused by the Somali government of breaching its profit-sharing agreement. Al-Bayrak currently oversees port operations under a 2014 concession agreement.
Mogadishu (HOL) — The Somali government has accused Turkish firms Favori LLC and Al-Bayrak of breaching profit-sharing agreements critical to managing Mogadishu's key infrastructure, including Aden Adde International Airport and Mogadishu Port. These alleged breaches raise significant concerns about transparency and could potentially deprive the Somali government of crucial revenue.
Somalia's Auditor General, Ahmed Issa Gutale, reported that both companies failed to submit required financial reports following independent audits. Gutale added that this failure has made it impossible for the government to verify its rightful share of the revenue generated from these operations, which are vital to the country's economic stability.
Favori LLC, which has managed Mogadishu's airport since 2013, is entitled to 25% of its revenue under its agreement with the Somali government. Meanwhile, Al-Bayrak, which began managing Mogadishu Port in 2014, currently receives 62.17% of the port's revenue. Despite these contractual obligations, the Auditor General said that both companies have consistently failed to comply with the terms of their agreements. Neither Favori LLC nor Al-Bayrak has issued a response to the allegations.
In response to the allegations, Favori LLC issued a statement on Tuesday, addressing the Ministry of Transport and Civil Aviation and other major airlines operating in Somalia. Favori LLC did not directly address or reject the specific claims made by Somalia's Auditor General regarding their alleged failure to submit financial reports and the breach of profit-sharing agreements. Instead, Favori LLC reaffirmed its exclusive right to collect navigation fees at Aden Adde International Airport, as stipulated in its concession agreement with the Somali government. The company emphasized that this agreement, signed in 2013, remains legally binding and in full force.
A Turkish Airlines plane at Aden Adde International Airport in Mogadishu, managed by Favori LLC under a 2013 concession agreement.
Favori LLC further rejected the involvement of any other entity in the collection of navigation fees at the airport and reminded airlines operating at Aden Adde International Airport of their contractual obligation to continue paying these fees directly to Favori LLC. They warned that payments made to any other party would be considered invalid and could lead to unnecessary complications.
As of now, Al-Bayrak has not issued any public response to the allegations.
The economic and diplomatic ties between Somalia and Turkey have grown significantly since 2010, when Turkey provided aid to Somalia during a severe drought.
Both Turkish companies have operated in Somalia since the early 2010s, following the country's transition from a Transitional Federal Government. Al-Bayrak Group, headquartered in Istanbul, initially focused on construction but expanded its operations to include sectors such as transportation, logistics, and port management. Favori LLC specializes in airport operations and has undertaken significant modernization projects at Aden Adde International Airport.