DRC President Accedes to the Request of Revisiting Chinese contract
The President of the Democratic Republic of Congo (DRC), Félix-Antoine Tshisekedi, says he is in favor of revisiting the collaboration agreement signed on April 22, 2008 between his country and the group of Chinese companies formed by China Airways Corporation and Synohydro .
The Congolese Head of State, Félix Tshisekedi made this known during the 91st meeting of the Council of Ministers held on Friday March 17, 2023 in Kinshasa.
Among the motivations that led to this position, Félix-Antoine Tshisekedi mentions cases of non-compliance with the provisions of the contract, non-performance of contractual commitments and subjectivity in certain acts taken by the parties.
“Faced with this state of affairs, the President of the Republic mentioned the urgent need to revisit this convention in the sense of a rebalancing of the advantages aimed at guaranteeing the interests of the Democratic Republic of Congo in the exploitation of Sicomines SA.
He therefore asked his cabinet to bring together all the stakeholders in order to prepare the elements that will be included in the discussions with the Chinese partner during the work of the joint commission which will take place very soon. “, indicates the minutes of the meeting of Friday, March 17, 2023 presented by the Minister of Culture, Arts and Heritage.
In his communication to the members of the Government, Félix Tshisekedi dwelled on the worrying nature of this situation which he describes as deplorable both on the one hand for the development of the mining sector which is to date the engine that drives growth economy of the DRC and on the other hand, by the slowness of the dynamism which should normally know the program of construction of the infrastructures which the DRC badly needs for the hatching of its potential as well human as economic.
The General Inspectorate of Finance (IGF) denounced the “imbalances” of the Chinese contract signed in 2008 between the Democratic Republic of Congo (DRC) and the group of Chinese companies.
According to the IGF, the Congolese State only received 800 million USD out of revenues estimated at 10 billion USD in the operation of SICOMINES.
The same document of the IGF informs that the Chinese earned during 14 years, approximately 90.9 billion US dollars against the commitments in their charge of 6.2 billion USD.
“90,936,120,000.00 USD to the Chinese against commitments at their expense of 6.2 billion USD, i.e. a gain for the Chinese of 84,736,120,000.00 USD to which should be added the tax exemptions provisionally estimated at the lowest rates lower at $2,163,623,850.15.
Even determining the net present value (NPV) on the basis of the elements retained in the 2021 Feasibility Study, the NPV is 76,573,723,516 USD which constitutes the gain in favor of the Chinese party because the NPV implies the deduction CAPEX and OPEX of turnover. 76 billion USD gain for the Chinese side against 3 billion in infrastructure for the DRC. “, we read in the report.
The General Inspectorate of Finance also notes a glaring weakness and the modesty of infrastructure investments.
According to the IGF report, “SICOMINES has mobilized, in 14 years, financing for a total amount of 4,471,588,685.14 USD and has only allocated 822,190,060.14 USD for infrastructure works, i.e. 18.38% of the total financing mobilized. »
The IGF’s investigations also revealed the lack of visibility and impact of the works carried out and their unjustified selectivity in violation of Annex C of the Agreement of April 22, 2008.
To date, eligible work performed is valued at $534,902,461.66 and non-eligible work performed is valued at $287,287,598.42.
