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Bollore's Niger-Benin rail project in jeopardy after rival wins court order
November 27, 2015 / 2:01 PM / 2 years ago

Bollore's Niger-Benin rail project in jeopardy after rival wins court order

COTONOU/DAKAR, Nov 27 (Reuters) - French conglomerate Bollore may have to halt work on the Niger to Benin section of its giant West Africa rail project after a rival company won a court order to stop it going ahead.

The dispute concerns rival rail schemes in the area.

Petrolin Group, chaired by Samuel Dossou-Aworet an oil tycoon from the tiny West African state of Benin, launched the legal action. It claimed the governments of Niger and Benin in 2010 had granted it the rights to build a railway linking Benin’s coastal capital Cotonou with Niger’s inland capital, Niamey, and that Bollore’s project overlaps with it.

The dispute exposes tensions in West Africa’s plans to roll out infrastructure to boost regional trade and propel growth over the next few decades.

Bollore’s 2 billion euro ($2.12 bln) Blueline project plans to link Ivory Coast, Burkina Faso, Niger, Benin and Togo via a 3,000-kilometre (1,875-mile) rail loop. The Niger-Benin part of the line is known as the “backbone” project.

“(The appeals court) orders both the state of Benin and the company Bollore Africa Logistics to refrain from any works on the components of the ”backbone“ project, subject to a fine of 100 million CFA francs ($161,809.68) per day,” the court said last weekend.

A spokesman for Bollore said this week it had been notified of the court ruling, adding that it was seeking clarity.

“We do not want to stop work but we must respect the court’s decision,” it said in an email to Reuters. “Benirail points out that the signed agreements stipulate that, in the case of a challenge, states will assume the consequences of prior agreements.”

It is not clear whether Benin’s government will implement the court order.

“There is no question of Bollore stopping construction,” said an adviser to the Benin government, who requested anonymity since he is not authorised to discuss the matter.

Petrolin began court proceedings in Benin last year against Bollore and the Benin government, which have since begun building a section of the line through their joint venture Benirail.

A Benin government spokesman did not reply to several requests for comment this week.

BACKBONE PROJECT

A Petrolin spokesman said: “It should be noted that Petrolin has the original (rights) to the backbone project.”

Petrolin says it discussed with other investors, including Bollore, allowing them to participate in its project.

The issue is complicated by a third rival rail scheme. Geftarail, a French company, also claims to have won the right to develop a Benin-Niger link as part of its Africarail project linking several countries in the region.

A few weeks ago Geftarail and its Niger subsidiary filed a lawsuit at the International Court of Arbitration in Paris against the Benin and Niger governments, demanding work on the Niger-Benin section of Bollore’s project be halted. ($1 = 618.0100 CFA francs) ($1 = 0.9442 euros) (Additional reporting by Samuel Elijah; Editing by Matthew Mpoke Bigg and Susan Fenton)

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