WORLD NEWS: War politics set to pay big dividend for Djibouti: Handling grain sent to help Ethiopia means opportunities for business and a vital infrastructure upgrade, says Mark Turner:
91% match; Financial Times ; 17-Apr-2000 12:00:00 am ; 446 words

It's raining grain in Dji bouti. In the sweltering heat of the small former French colony, scores of dockers noisily unload and bag 50kg sacks of European Union-bought wheat from the Vale, a vast Greek-owned bulk carrier. Swirling kernels choke the air, clouds of pigeons gorge themselves on the bounty.

The grain is destined for Ethiopia, where aid agencies warn that 8m people are at risk of famine. But to Ali Hettam, the stevedore in charge of the 2,500-tonne, 24-hour-a-day unloading operation, it is an excellent commercial opportunity.

His company, Comad, is paid around Dollars 12.50 (œ7.80) a tonne to unload, bag and shift grain on to lorries. Over the next eight months, his prospects are encouraging - the World Food Programme (WFP) is looking to ship 170,000 tonnes of food a month, of which the lion's share will go through Djibouti port.

If, as he claims, Mr Hettam has 65 per cent of the market, he could be looking at monthly turnover of around Dollars 1m - a healthy sum, even after costs. "Business is very good," he confides.

He is one of the winners not only from a big food operation, but also the vicissitudes of war politics. The Ethiopian government has refused to accept Eritrea's offer to bring aid supplies through the port of Assab, which can handle 2m tonnes of cargo a year and, before the neighbours' two-year border war, used to serve around 80 per cent of Ethiopia's needs. The United Nations - despite clear indications it would prefer to use Assab's donor-improved facilities - has agreed to focus on the alternatives.

The WFP estimates that 170,000 tonnes of food a month will be needed to avert disaster in Ethiopia. At present, Djibouti is capable of handling 100,000-110,000 tonnes in its deep-sea berths, while the Somaliland port of Berbera can take around 25,000 tonnes. That leaves a shortfall of 35,000-45,000 tonnes a month.

To fill that, the WFP has embarked on a Dollars 2.7m port improvement project. In order to keep the supplies flowing south, the WFP plans to bring in 400 lorries from abroad, adding to its own fleet of up to 550 in Ethiopia. The organisation will also spend several million dollars on roads.

It will be a tight operation, with little room for error. It is also big business. On average, delivering food from its point of origin to a hungry Ethiopian costs Dollars 250 per tonne. Multiply that by an expected 1.35m tonnes of food over eight months, and that makes almost Dollars 340m dollars in transport alone.

But the operation does raise questions. By developing Ethiopia's alternative supply route, one could argue the UN has become an agent of Addis Ababa's aim of isolating Eritrea. One impetus to end the war - Ethiopia's difficulty in finding an alternative port - may have lessened.