Hopes dim for constructing Gaza seaport in near future

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Officials of Israel and the Islamic Hamas movement have been recently talking about the possibilities of constructing a water passage that links the Gaza Strip and Cyprus as one option to ease the mounting humanitarian crisis gripping the coastal enclave.

However, chances for actually building a seaport in Gaza in the near future are very slim, observers say.

No one knows where the much-talked-about seaport will be located, but the Gaza Wharf has witnessed several international attempts to defy a siege imposed by Israel.

The Israelis have foiled all such attempts, including one in May 2010, when the Israeli naval commandos stormed a Turkish aid flotilla, killing nine activists.

Turkish and Israeli officials recently talked about restoring political and economic ties between the two countries, which were broken following the flotilla attack, and one of Turkey’s conditions is to end the Gaza siege.

Khalil al-Hayyah, a senior Hamas leader in Gaza who has been tracking progress in the talks between Israel and Turkey, said “lifting the Gaza siege would never happen without agreeing on constructing a seaport for the Gaza Strip to link the territory with the entire world.”


Meanwhile, the Palestinian Fatah Party Central Committee warned on Monday of Israel’s plan to isolate the Gaza Strip from the entire occupied Palestinian territories.

Fatah accused Israel of using various names such as a floating seaport or a sea passage to keep the Palestinian territories in two parts: the Hamas-ruled Gaza Strip and the West Bank.

Hani Habib, a Gaza political analyst, told Xinhua that the Israeli terms for constructing a seaport in Gaza “are clearly showing that Israel is determined to keep the internal Palestinian split for ages and to create a new situation for Gaza that keeps it independent and totally isolated.”


Economic experts in Gaza said that construction of a seaport in the strip will certainly help revive its economy, creating thousands of jobs during the first year of operation.

Omer Sha’ban, one Gaza economist, told Xinhua that the seaport for Gaza will be the sole sea gate for the establishment of the future Palestinian state once the decades-old Israeli-Palestinian conflict is resolved.

“A seaport is important not only for the Gaza Strip, but also for the West Bank, which basically depends on the Israeli seaports for export and import,” said Sha’ban.

He said constructing and operating a seaport in Gaza “would create 50,000 job opportunities,” resulting in a big jump in the Palestinian economy as a whole and in development in human resources and industry in particular in the Palestinian territories.

The seaport, on the Mediterranean and with access to Suez Canal, would link Gaza with Europe, America, Asia and beyond, he said.

Building a seaport for the Gaza Strip was one condition put forward by Hamas in Egyptian-borkered talks in Cairo to end hostilities following a large-scale military offensive by Israel against Hamas-led militants in the summer of 2014.

According to the August 2014 agreement, Israel and Hamas were to hold indirect talks one month after the ceasefire to discuss issues like constructing a seaport for the Gaza Strip and operating Gaza airport.

The two sides, however, have never met again after that.

The project of constructing a seaport and an airport for the Gaza Strip was part of Oslo Accords that Israel signed with Palestine Liberation Organization (PLO) in 1993.

The airport was built and operated from 1998 until 2000, the year the second Intifada, or Palestinian Uprising, broke out. The radar station and control tower were destroyed by Israeli Air Force in 2001.

The seaport project did start, in July 2000, but stopped soon due to obstruction of the supply of construction materials, and destruction by the Israeli army in late 2000, also due to the Intifada.

In the 2005 Agreement on Movement and Access, reached after Israel’s unilateral disengagement from Gaza, Israel promised international donors that it will not interfere with operation of the port, but construction never resumed.


Talk of building a seaport has raised expectations that the misery suffered by residents in the enclave might ease after a blockade of nearly 10 years.

“Constructing a seaport for the Palestinians is a sweet dream,” said 65-year-old Abu Sallah Sa’ed, who was sitting on the beach near Gaza Wharf.

“Once it comes true, it will end the crisis and all our daily problems,” he said. “No one wants war. Poverty is the enemy of mankind.”

“A better life without siege is the best guarantee of peace for all our children,” Sa’ed said.

Hussein Rajab, who sells hot drinks at Gaza Wharf, is skeptical.

“I don’t think that one day, there will be a seaport for Gaza,” said the 42-year-old vendor, who peddles coffee and tea from a push cart. “We always dream of having a seaport and see big ships coming and leaving, but this will never happen.”

The ongoing Israeli blockade has thrown the densely populated enclave into humanitarian crises, with widespread poverty and unemployment.

International aid organizations have warned of disasters and collapse in the near future if the situation continues in Gaza.

Abu Jamal Subeih, a Gaza fisherman, was pessimistic that the Palestinians’ lot will improve any time soon.

“I rule out the possibility that Israel would accept the construction of a seaport for Gaza,” he said. “They have been doing this against us for so many years, therefore I don’t believe Israel would let us having our own seaport to connect with the outside world.”
Source: Xinhua

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A Palestinian's dream of reaching the Rio Olympics

It is early morning in Ramallah and Mohammed al-Khatib is busy warming up before a training session at the local school running track.

The 25-year-old aspires to qualify for the 2016 Olympic Games in Rio as a professional athlete. He also wants to do it for Palestine.

It hasn’t been an easy journey for Khatib, who plans to run the 100-200m sprint double. The West Bank lacks facilities for athletes and restriction of movement makes it difficult to plan ahead and travel for competitions.

Gaza’s crippling infrastructure owing to the blockade means shiny stadiums and modern tracks are out of the question for practice. Israeli forces bombed the enclave’s Palestine Stadium in 2006 and then again during Operation Pillar of Cloud in 2012.

“I want to win an Olympic medal for Palestine. I know it’s the hardest thing to do, but I’m going to try,” Khatib told Al Jazeera.

“To represent Palestine at the Olympics is bringing hope to my people.”

The West Bank lacks facilities for athletes and restriction of movement makes it difficult to plan ahead [Eloïse Bollack/Al Jazeera]

Khatib is from Hebron, where around 170,000 Palestinian inhabitants feel Israel’s occupation at its worst. The area remains tense, with illegal settlements dividing the heart of the city between the Israeli-controlled sector known as H2 and H1 for Palestinians.

In West Bank and Gaza, sports enthusiasts are all too familiar with the result of the occupation on their training. Equipment is difficult to obtain and travel restrictions create further obstacles for athletes.

Competing in international games is frustrating for Palestinians because they usually need a two-day head-start to fly from Jordan and back, typically resulting in a lengthy wait at checkpoints.

WATCH: Blind karate kid dreams of representing Palestine

Last May, the Palestinian national football team was held at the Allenby Crossing on the Jordanian border for “security reasons” hours after Israeli President Benjamin Netanyahu had vowed to ease travel restrictions on players.

In 2014, key runners from Gaza including Olympian Nader al-Masri, a veteran of 40 international competitions, were denied entry to the West Bank to participate in the annual Palestine marathon.

“When I think about Israel, I think about injustice and inequality for sure. We share the same land but when you see it so clearly, on one side they have a clean, beautiful football field and the other side, we barely have water to plant our own plants, never mind grass in a football field.

“I find this frustrating and it’s an injustice. This is one of the messages I carry.”

Because there are no professional coaches in the West Bank, Khatib started training alone by teaching himself running techniques through YouTube.

Khatib is from Hebron, where around 170,000 Palestinian inhabitants feel Israel’s occupation at its worst [Eloise Bollack/Al Jazeera]

His workouts were limited to the streets or, occasionally, when he was able to get access to the tracks at Birzeit University or the local high school in Ramallah.

“When the tracks weren’t open, I would train on the streets,” he said. “Access to the school was either early in the morning – before classes started around 6am – or after the school day was finished at 4pm, and usually I would have work at this time or I would be tired.”

The asphalt track in Birzeit is only 84m in length and not suitable because it can cause injuries owing to the rough surface.

‘I am so close’

Despite all that, Khatib still persevered.

“I knew I had two options. I would either start blaming the world for not having a decent track or equipment and I would just give up. Or I would try to find my way around it and that’s what I did.”

In three years, Khatib has brought his 100m time down from 15 to 11 seconds, which is just off the 10.16 seconds required to qualify for the Games.

“I know a lot of athletes in Palestine face all these difficulties and at some point they give up. I almost gave up at one stage, but it’s really just about going forward regardless if I’m crawling,  walking or running.

“I just keep going forward and here I am, I’m so close.”

In order to fulfil his potential and stand a realistic chance, he raised money online by crowdfunding to train with a coach in the US – taking a step closer to qualifying as such opportunities are not readily available in Palestine.

In three years, Khatib has brought his 100m time down from 15 to 11 seconds [Eloise Bollack/Al Jazeera]

Through the various sums of foreign aid, which the Palestinian Authority is heavily reliant on, little goes towards sports.

The European Union in January approved a €2m ($2.2m) grant towards social infrastructure for communities in Area C – comprising 60 percent of West Bank land currently controlled by Israeli security forces – but the funds will build schools, roads and water networks.

The Palestine Olympic Committee has been the official body representing these athletes since 1996. It lacks the manpower to establish proper training facilities for athletes but is working with the Olympic representatives to improve facilities across the region.

“There is plenty of help from the International Olympic Committee for funding and training but funding alone doesn’t help,” Susan Shalabi Molano, spokeswoman for the Palestine Olympic Committee, said.

“Imagine if you receive the funds to construct a stadium and then you don’t get a permit from the Israelis to build it. What is the use then? We are trying, though. A little bit is better than nothing. The suffering continues but we are trying.”

Molano said building permission from Israeli authorities is rare and little progress has been made to improve the situation.

“When we want to get players from Gaza, for example, they go through Egypt and meet in some third country where they can train because access to the West Bank isn’t easy. It’s difficult and time-consuming but this is the only solution we have in the end.

“Players are detained or hindered when they move from one place to another and that won’t stop as long we live in these circumstances.”

Other athletes have felt the effect of Israeli occupation on their training. Palestinian swimmer Sabine Hazboun competed in the women’s 50m freestyle at London 2012, finishing with a personal best of 28.28 seconds.

The 21-year-old “met the real world there”, which was a huge contrast from the rundown swimming pools in her hometown of Bethlehem.

Hazboun moved to Barcelona, where she could train at a professional level as there was no sizeable pool available in the West Bank for her to practise in.

“I started swimming aged nine in an 18m pool. It started as a hobby but then I wanted to be more serious and eventually go to the Olympics.

“When I wanted to practise, I saw more obstacles because it’s so difficult, we don’t have the facilities like other countries. We need more gym facilities, we need swimming equipment and experienced coaches,” she said.

For now, back in Ramallah where Khatib prepares for his US trip, qualifying will be a victory against occupation and he isn’t going to put his running shoes down without a fight.

Khatib started training alone by teaching himself running techniques through YouTube [Eloïse Bollack/Al Jazeera]

Source: Al Jazeera

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What the Israeli-Turkish reconciliation says about Gaza

The oft-postponed and much discussed reconciliation between Turkey and Israel appears to be approaching its endgame. The strictly bilateral understandings on compensation and an apology by Israel for the deadly assault on the Mavi Marmara passenger ship almost six years ago have been finalised.

As both Turkish President Recep Tayyip Erdogan and Israeli Prime Minister Benjamin Netanyahu recently got elected for the office, there is no question about their power and influence in the foreseeable future. Like it or not, if there is to be an agreement, Erdogan and Netanyahu will have to overcome their mutual antipathy in pursuit of a mutually advantageous strategic payoff.

The long-awaited rapprochement now centres on an unlikely competition for advantage in the all but abandoned Gaza Strip, against a background defined by the regional fallout from Turkey’s mistakes in Syria and the slow if deliberate turnaround in Israel’s view of the permanence of Hamas’ presence.

Closing Mavi Marmara file

Turkey has long insisted that closing the file on the Mavi Marmara should include an end to Israeli restrictions on trade with Gaza.

In this context Turkey has demanded, and Israel has rejected, “unrestricted access” to Gaza for Turkish assistance and trade.

ALSO READ: Gaza Flotilla – a war crime, but a minor one

For many years, Turkey has tried to play an economic role in Palestine, both in Gaza and more successfully in the West Bank. To that end, the Turkish think-tank the Center for Multilateral Trade Studies at the Economic Policy Research Foundation of Turkey (TEPAV), together with the powerful Union of Chambers and Commodity Exchanges of Turkey (TOBB), has recently prepared an ambitious $5bn Gaza reconstruction plan, that includes a port.

“We have made a strategic plan,” explained Guven Sak, the foundation’s managing director who prepared the report. “A Gaza port will be one of the most important projects of this plan.”

In Israel, the prospect of a port in Gaza has travelled a tortuous road. When Hamas first raised the idea of rebuilding the simple port destroyed by Israel during the Second Intifada, it was dismissed as impossible.

Now after many years and much conflict, the issue has been placed squarely on the desk of Netanyahu.

The engine driving this change is, as always, Israel’s security establishment.

After Hamas established uncontested control of Gaza in June 2007, Israel, together with the international community, adopted a draconian policy of restricting imports into Gaza and banning all exports, in the hope of fatally weakening the Islamist government.

Eight years and three wars later, Hamas is still in the chair, presiding over a besieged population of close to two million people and is heading full steam in a race to the bottom.

Gaza – and Palestine as a whole – is paying an extraordinary price for this policy. According to the Untied Nations, Gaza will be “uninhabitable” by 2020 if current conditions persist.

The UN report didn’t reveal anything that Israel’s defence and intelligence officials – the architects of this policy – do not already know. But they now warn that Palestinians will not be the only ones to pay the price for Gaza’s engineered descent into penury.

OPINION: The future of Gaza looks bleak

At a recent closed briefing on Gaza by the head of Israeli military intelligence, Major General Herzl Halevi reportedly said that, “If there won’t be improvement [in Gaza], Israel will be the first to feel it when things explode”.

Halevi explained that the critical difference between Hamas’ military capabilities, which continue to increase, and its intentions. Hamas, he said, does not want another round of hostilities with Israel and is working to prevent rocket fire into Israel. Gaza’s reconstruction, he told the Knesset, is the best way to prevent another war.

A feasible port of Gaza

In recent weeks numerous reports, inspired by progress with Ankara and the dawning realisation that Israeli security can be improved by opening Gaza to trade and commerce, have highlighted the role of a Gaza seaport as the keystone of a new, more benevolent, if self-interested, strategy.

Pro-Palestinian Turks gather on the fourth anniversary of the Mavi Marmara incident. [AP]

For more than a year, Israeli security and trade officials have studied the numerous security and administrative aspects of a Palestinian seaport, defining at least five options and outlining the security and operational challenges that each presents. The options range from an offshore port and airport on the Dutch model, to privileged use of the Israeli port of Ashdod or the Egyptian port of al Arish.

Senior Israeli military officers are confident that security issues regarding the port’s administration can be addressed, and they made clear that the security implications of a seaport are manageable. What is now required is for Israel’s politicians, notably Netanyahu and his minister of security, Moshe Yaalon, to address the issue.

Hamas’ political leadership, which has long understood both the strategic and political advantages of a maritime outlet, has made supportive noises.

OPINION: No more flotillas

“The Strip needs and wants a seaport, and that issue has also been conveyed to the Turks. The siege on Gaza will not be lifted without the establishment of a seaport,” senior Hamas official Khalil al-Hayya said at a recent symposium in Turkey.

“What does the world fear? That we’ll smuggle weapons? We have no intention to smuggle weapons and the world is invited operate any monitoring mechanism it wishes on this port,” he added.

The Egypt factor

Egypt is the other key player contesting for influence in Gaza. In Cairo, two views prevail: One opposes a seaport if Hamas is to reap the benefits promised by an end to the siege. The other favours any move – including a port – that reflects Israel’s continuing responsibility for Gaza’s welfare and security as the internationally recognised occupying power.

Trumping each view is the continuing antipathy between Ankara, which has yet to recognise the Abdel Fattah el-Sisi government, and Cairo, which opposes Erdogan’s support for the outlawed Muslim Brotherhood and his desire to be viewed as Hamas’ patron and Gaza’s saviour.

However, a tentative engagement between the rivals, hastened by regional upheavals, may occur at the April Organisation of Islamic Cooperation meeting in Istanbul.

If Erdogan and Sisi can resolve their differences and end their zero-sum game in Gaza, another impediment to Israel’s endorsement of a Mediterranean seaport in Palestine will be removed.

Geoffrey Aronson writes about Middle Eastern affairs. He consults with a variety of public and private institutions dealing with regional political, security, and development issues.

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.

Source: Al Jazeera

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Iran: GCC's terrorist label for Hezbollah is a mistake

Iran’s deputy foreign minister has said that a decision by a Saudi-led bloc of Gulf Arab states to label the Lebanese group Hezbollah a terrorist organisation was a “mistake”.

Iranian state TV on Thursday quoted Hossein Amir Abdollahian as saying that the Gulf Cooperation Council’s move would undermine peace in the region and the unity of Lebanon.

He said it was a “new mistake” by the GCC and that Iran was “proud” of Hezbollah.

On Wednesday, GCC Secretary-General Abdullatif al-Zayani said that the six Gulf monarchies took the decision because “the [Hezbollah] militia recruited young people [from the Gulf] for terrorist acts”. 

OPINION: Lebanon and Saudi Arabia’s love and hate relationship

Hezbollah, a Shia political organisation with an armed wing, fights in neighbouring Syria to support the government of President Bashar al-Assad. 

The Sunni-dominated GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

Gulf nations have taken a series of measures against Hezbollah since Saudi Arabia last month halted a $4bn programme funding French military supplies to Beirut.

Hezbollah is backed by Saudi Arabia’s regional rival Iran, with whom relations have worsened this year. The two nations are on opposing sides in conflicts in Syria and Yemen.

Announcing the military funding cut last month, a Saudi official said that the kingdom had noticed “hostile Lebanese positions resulting from the stranglehold of Hezbollah on the state”.

Riyadh would be conducting “a comprehensive review of its relations with the Lebanese republic”, the unnamed official told the AFP news agency.

He specifically cited Lebanon’s refusal to join the Arab League and the Organisation of Islamic Cooperation in condemning attacks on Saudi diplomatic missions in Iran in January.

Riyadh cut diplomatic ties with Tehran after demonstrators set fire to its embassy and a consulate following the Saudi execution of a prominent Shia cleric

‘Spare Lebanon’

Hezbollah Secretary-General Hassan Nasrallah lashed out at Saudi Arabia during a televised speech on Tuesday. 

“The kingdom is trying to put pressure on the Lebanese to try to silent us but we will not be silent on the crimes the Saudis are committing in Yemen and elsewhere,” Nasrallah said. 

“Does Saudi Arabia have the right to punish Lebanon, its state and its army because a certain party has decided to raise its voice?” he asked.

“If they have a problem with us, let them keep it with us, and let them spare Lebanon and the Lebanese,” Nasrallah added.

Jamal Abdullah, head of the Gulf Studies Unit at the Al Jazeera Centre for Studies, said he did not believe that the Gulf decisions targeted Lebanon as a whole.

“The relations between Gulf states and Lebanon are governed by diplomatic norms and strong links from their shared membership in the Arab League,” Abdullah said.

The GCC supported Hezbollah throughout the past three decades in its resistance against Israel. However, the bloc has always condemned Hezbollah’s military intervention in Syria.

“This was a milestone in the nature of the relationship between Hezbollah and Gulf countries,” Abdullah said.

Source: Al Jazeera and agencies

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Blind journalist seeks out Palestine's forgotten voices

Jerusalem – Born blind, Budour Hassan lacked confidence as a child when visiting new places or trying new things. Even stepping outside was a challenge.

Now, at the age of 26, she seems worlds away from her childhood in Nazareth.

Spinning the occupation: Israel and the media – The Listening Post (Full)

“There have been times at protests, when Israeli police have been beating people. There has been a lot of tear gas, and people have been shouting, ‘She can’t see, she can’t see’ as a way to try and protect me,” Hassan told Al Jazeera, sipping on a double espresso.

“You know, I understand why they say this, but if I’m honest, I don’t like this so much.”

Covering protests and clashes has become second nature to Hassan, a Palestinian journalist who reports for several media outlets and websites in Arabic and English.

She has been beaten by Israeli soldiers and even collapsed at one protest after inhaling tear gas, but she remains undeterred.

“People are surprised that someone can be blind and a journalist,” she said with a slight, infectious grin.

READ MORE: Palestinians defy Israel’s Jerusalem ban

Hassan first found journalism at  21, writing sports reports for an American website before turning her pen to Palestine. Her move from Nazareth to the busy streets of Jerusalem at 19 was daunting, but learning to negotiate the narrow alleys of the Old City became a confidence-booster, she said.

“The Palestinian areas of Jerusalem, as well as the West Bank, are incredibly hard to navigate, even for people who have perfect sight,” she said, laughing.

As she walked towards Damascus Gate, crowds of people rushed by, vendors shouted and vehicles honked their horns, but Hassan did not seem fazed.

Hassan, who writes on a laptop with via a braille keyboard, knows she has come a long way from her more introverted past. She has devoted herself to covering the sometimes forgotten stories of Palestine, such as the aftermath of home demolitions, or the continued suffering of families who have lost a child. 

“The most important thing for me is to get the human angle of things. What I try to do is just be the storyteller, and put everything into a political context,” she said.

“There have been so many cliches [written by journalists], especially about Palestinian mothers. There is no such thing as a Palestinian mother. Everyone handles grief and loss differently; of course, there are things that you can find in common, but you can’t just create this idea that there is a stereotypical Palestinian woman or man, Palestinian mother or father. It is important to talk to them and give them the right to say whatever they want.”

INTERACTIVE: Do all roads lead to Jerusalem?

Hassan admits that there are also challenges to being a blind journalist. She often gets lost when out covering stories, especially in the occupied West Bank, and has to rely on strangers for help. She knows that she misses details by not being able to see, such as the way someone’s face reacts to questions, or how they use their hands. 

“I’ve learned to become a very good listener,” she said. “I focus on their voice, on their words, the lilt of their voice – the very small details that I imagine if you focused on someone’s face too much, you could miss.”

Hassan has also heard people make negative remarks about her when she is out reporting, suggesting it would be better for her to stay at home. While this can be hurtful, Hassan said, she hopes that her continuing work will help to change people’s perceptions.

But she says that she has to work harder than her peers to prove her capabilities. “When you are a person with a disability, especially a woman with a disability, is it not enough that you are good? No, you have to be excellent,” she said.

“And when you are an Arab woman with a disability, you have to prove yourself more. It takes people longer to take me seriously than they do for a Western, male, sighted journalist.” 

Despite the challenges, Hassan remains optimistic about her future, and hopes one day to travel to Latin America to work. 

“You have two ears and two eyes,” she said. “Well, I have four ears for my work. And really, it is amazing, I think, just how many things can be missed if you are not listening well.” 

Source: Aljazeera

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Japan’s oil import prices rise as glut looks to ease


Japanese oil companies will pay more for imported crude on the back of a potential output freeze.

Japan imports about 80% of its crude from Saudi Arabia and other major oil-producing nations under long-term contracts. Prices are reviewed monthly, with adjustments to the average for Dubai crude — the benchmark for Asia — and Oman crude.

The long-term contract price for Arabian light crude oil, from Saudi Arabia, rose to $28.92 a barrel for February, up 13% from January, when the price hit the lowest in more than 12 years. As signs emerged that oil exporters may cap output, Dubai crude in the spot market climbed to a two-month high Tuesday.

Output by OPEC members likely edged down to around 32 million barrels a day for February. Iran boosted production after Western sanctions were lifted, but countries such as Nigeria and Iraq recorded declines. As export heavyweights including Saudi Arabia and Russia have moved to freeze output, the market share war that had been overheating appears to be running its course.

Because Iran’s oil field infrastructure is aging, an increase in the country’s exports this year will be limited to 400,000 barrels a day, below the government target of 1 million barrels, said Sushant Gupta, research director at Wood Mackenzie, a U.K. energy consultancy.

Leading U.S. shale oil producers such as Marathon Oil plan to cut output by about 10% on the year in 2016. A full-scale production correction is expected to begin in midyear.

Speculative investors are growing bullish, anticipating an improved supply-demand balance. Speculators’ net buying of North Sea Brent crude stands above 120,000 contracts in the London market, the highest since last May.

But it will take a while for the supply glut to ease. Given the record inventories, Brent will face a ceiling of $50 a barrel for the rest of 2016, Gupta predicted.
Source: Nikkei

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KQ sells its prime London airport landing slot to Oman Air for Sh7.5 billion

A Kenya Airways plane at the Jomo Kenyatta International Airport: The carrier’s morning slot will now be used by Oman Air starting March 27. PHOTO | FILE  

By DOREEN WAINAINAH, [email protected]
Posted  Thursday, March 3   2016 at  09:01

National carrier Kenya Airways has sold off its prime landing slot at London’s Heathrow airport for an estimated Sh7.5 billion in a move aviation experts say could significantly affect the airline’s attractiveness to passengers on the UK route and slow down the speed of recovery.

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The morning slot, previously used by Kenya Airways, will now be used by Oman Air starting March 27, the same day KQ will begin its afternoon arrivals in London.

It has also emerged that Oman Air has agreed to a wet leasing deal for two of KQ’s Boeing 787-8s as part of the investment by the Middle Eastern airline.

Wet leasing deals in aviation are those where an airline leases out an aircraft, complete crew, maintenance and insurance to another airline in return for pay by hours operated.

KQ, as the Kenyan carrier is commonly known, has sold the morning slot it inherited from the defunct East African Airways under what is termed grandfather rights for US$75 million in addition to the evening departure slot it sold to Emirates for between $15 – $25 million, making a total deal value of $90 – $100 million. 

Slot transfers

News of KQs sale of landing slots first broke in the UK’s Sunday Times, which reported that the deal between the carrier and Oman Air is one of the three slot transfers that took place at Heathrow this year.

Air France-KLM, which owns a 27 per cent stake in KQ, is said to have transferred two additional slots, one to Oman Air and the other to Emirates.

KQ’s sale of its coveted 5.30 a.m. arrival slot is the highest priced deal to have taken place at Heathrow, beating the previous Sh6 billion ($60 million) record payment that American Airlines made to Scandinavian carrier SAS a year ago.

Reports indicating that KQ pocketed only Sh3 billion of the total Sh7.5 billion earned from the sale of the prime morning landing slot has raised questions as to how the national carrier shared the sale proceeds with its partners AF-KLM.

KQ declined to comment on this story stating that it planned to share the information in due course.

The airline is estimated to have earned Sh3 billion from the deal that is expected to go into offsetting the carrier’s heavy debt load.

Slots at Heathrow lose value as the day progresses, with early morning arrivals fetching the highest value. The value of slots drops by 30 per cent by midday and by 50 per cent by evening, according to an earlier report by Heathrow Airport Holdings.

This means if an early morning slot is valued at Sh10 billion, a midday slot would fetch Sh7 billion and Sh5 billion for the same slot in the evening.

KQ last month announced that it had changed its flight schedule on the Nairobi-London route as part of its cost-cutting strategy but fell short of disclosing any information about the sale of the prime landing slot.

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EDITORIAL: Vetting of company CEOs and directors long overdue

The proposed corporate governance rules allowing the Capital Markets Authority (CMA) to vet top managers and directors of quoted firms are long overdue.

Kenya has witnessed numerous cases of malfeasance by top executives of companies listed on the Nairobi Securities Exchange.

A number of managers and directors have treated quoted companies as their personal property, giving themselves business that should have been sourced with shareholder value in mind.

Others have committed outright fraud, engaged in money laundering and asset stripping and released distorted financial statements to hide their wrongs. These crimes are often only discovered after a time-consuming and expensive forensic audit.

The rogue managers take advantage of the fact that hardly enough attention is paid to their suitability for positions that determine how huge amounts of company cash are used.

The new rules may very well end up changing the holders of senior positions in several listed companies given that they propose the vetting of both the current and incoming executives.

This is as it should be in a country where investors have experienced significant losses arising from the mismanagement of listed companies.

But even before the new rules come into force, the CMA still has considerable latitude in forcing listed companies to safeguard investors’ interests whenever they make decisions with far-reaching financial consequences.

For example, where a CEO is proved to have a conflict of interest in a company, the CMA ought to force him or her to relinquish the position.

The Mumias Sugar, Uchumi Supermarkets and CMC Motors cases have revealed how rogue executives can lead a company down the garden path to the detriment of investors.

In the vetting, the CMA will need to collaborate with other regulators outside Kenya where a director or manager has a significant local shareholding through a foreign entity.

Cases of overseas investors with dubious business backgrounds, such as Dawood Rawat, who previously owned a significant stake in a local financial services firm and was found to have been behind a Ponzi scheme in Mauritius, serve as a reminder that foreign directors and managers of quoted firms ought to be screened thoroughly.

If Kenya is to become a financial hub for the region and beyond, it has to adopt global best practices in terms of applying corporate governance rules for listed companies.

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