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Thursday, September 29, 2022

Inside the Securiprofit deal (Part 2)

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By Mustapha K Darboe

Securiport comes for pound of flesh

The company has demanded $4.5m and contract extension of five more years after the collection could be start on time

The initial plan was to charge the $20 on the ticket. But the move was rejected by the International Air Transport Association (IATA).

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 “There is already a security fee in the $37 Gambia Civil Aviation Authority levies in any ticket,” Abdoulie Jammeh said. “There were also concerns charging $20 will make the ticket prices more competitive in Senegal.”

The government has communicated this frustration to the Securiport, requesting an extension to figure out how to shoulder the cost.

The Securiport reacted by drafting an addendum to the contract, demanding an extension from 10 to 15 years because of the delay to the commencement of the contract.

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For the same delay, the company submitted a bill of $4.5m to the government.

When asked, Securiport told Malagen that the payment is in line with the contract and defended it as just.

“Securiport finalised its installation and started on March 2019 its operation,” the company said in an email response.

“Given the Government’s request for an extension until September 2020 to start the fee collection, Securiport maintained the systems, trained personnel, and provided technical support without receiving any revenue until September 2020.”

Official documents seen by Malagen confirm that the government has agreed to the company’s demands for contract extension and payment of the ‘accrued arrears’ without consulting the ministry of justice.

Evidence gathered shows that the ministry of finance has already disbursed D218m, paid in several instalments, from Feb. 2021 to June 2022. The balance of D55m is arranged to be paid in Dec. 2022. This will complete $4.5 (D247m) payment of ‘accrued arrears’.

“They have got a double payment,” Abdoulie Jammeh said. “They claimed there was a delay. But the initial agreement was contingent on putting the charges on a ticket. That could not be implemented. So, there is no delay.”

The auditors share Jammeh’s sentiment. Describing the payment as ‘inappropriate’, the auditors said there was a risk that the government has paid for what it has no obligation paying.

But how much of investment has Securiport done here? Ask that to the company and they become economical with information, citing confidentiality.

 “Given the sensitivities of our services, for security reasons and due to the nature of the work provided to our client, it would be best to speak to the specific State authorities in the Gambia,” the company said.

But this is a company that enjoys tax exemption, granted duty waiver, and allocated three spaces at the Banjul International Airport for free.

Tax exemption questioned

The deal exempts Securiport from ‘all taxes, duties, or contributions of any kind whatsoever, whether municipal, national or regional, that are assessed on the project or contract’.

Even expatriate quota has been waived for them.

However, the auditors and national revenue authority are not having the terms of the contract as final. In their view, the company’s actions constitute tax evasion.

Malagen has seen a Dec. 2020 correspondence where the Gambia Revenue Authority requested the company to pay D1.1m tax liability. This is based on administrative tax alone.

“That tax exemption is not done in the right way,” a senior official at the the GRA said, adding that a more comprehensive assessment could take the tax liability to up to D5m per annum.

Citing the Income and Value Added Tax Act 2012, he pointed out that the president can exempt any person from paying tax subject to the approval of the National Assembly.

In this case, Securiport’s tax exemption was not put before the National Assembly, Malagen has confirmed from sources there.

The Gambia Import and Export Promotion Agency (GIEPA) has also confirmed that the U.S company did not obtain a special investment certificate.

To Securiport, however, that is the government’s job to do, not theirs.

 “It is clearly stated in the contract that it is the responsibility of the Government to enact all the provisions required including legislative action to ensure the validity and effectiveness of the referenced tax and customs exemptions,” Securiport said.

Irregularities in finances

Malagen can confirm that the operations of Securiport have been a subject of investigation by the National Audit Office.

In the contract, Securiport and gov’t have agreed to open a joint bank account for the funds collected. But in practice, only Securiport had been collecting and depositing the funds. Well, not all of it, apparently. 

 In one instance, the auditors have discovered under-reporting of revenue of up to D12m. In another instance, the company transferred up to D10.3m before the revenue was shared.

“This suggests a deliberate attempt by the Securiport to suppress and divert cash collections to personal accounts,” the auditors queried.

As the government fails to monitor, and with the immigration staff shut out of ‘equipment in the server room’, Securiport’s hands were deep in the cookie jar.

 “A pressure came later,” Abdoulie Jammeh of GCAA told Malagen. “I don’t know if it came from the auditors. Then, we started a joint account.”

Analysis of the instances of financial malpractice by Securiport indicates that there is a potential financial loss of D55.1m. This excludes the $4.5 (approx. D247.3), of which D218m has already been paid to Securiport.

Tourism industry hit hard

Back in 2019, when the levy was announced, Liane had warned that the move would hurt tourism, one of the country’s precious sectors. True to her predictions, one of the tour operators cancelled operations in Gambia, citing the $20 as one of the reasons

The travel and tourism industry seems to be particularly affected by the introduction of the security levy and has protested it.

“The Gambia is the only country in Africa that is charging arrival tax on passengers using its airport,” Abdoulie Touray, a seasoned economist and board chair of Gambia Tourism Board had told The Chronicle.

Liane Sallah, owner of African Adventure Tours and chairperson of the Travel and Tourism Association Gambia, told Malagen that the timing of the security levy is not appropriate.

 “We have been struggling for the past two years from the effects of Covid-19 and this thing [security fee] is not helping,” she said.

Back in 2019, when the levy was announced, Liane had warned that the move would hurt tourism, one of the country’s precious sectors.

Three years later this year, Nordic Leisure Travel Group announced that it was cancelling trips to The Gambia, citing ‘higher cost and increase of passenger tax’ at the airport.

 “You see now with the Nordic Tour Operator have now decided that they will not come, and the security fee is one of the reasons,” Liane said.

“Nordic brings about four flights of good, quality tourists,” she added.

Will there be accountability?

Malagen has solicited comments from the Office of the President. None of our emails has been responded to.

Yankuba Saidy, the key figure behind the contract has also refused to comment on the issue.

“Yes, I blocked your numbers because I don’t want to talk to you. I am under no obligation to talk to you,” he said, when paid a visit at his office for the fourth and final time. He went on to talk about the issue for nearly two hours defending the contract and his role in it but said none of it should be quoted in the story.

Meanwhile, the National Audit Office has recommended thorough investigations into how the contract was awarded.

The presidency agreed to do that, and instituted a presidential task force in July to ‘review the operations’ of Securiport in light of the audit findings. But the task force has so far met only once, according to our sources.

Meanwhile, the auditors have further recommended those behind the contract should be held accountable.

On that though, the presidency promises to ‘refer it to the cabinet for decision’.

But is it not the same cabinet that is said to have approved the contract?

Read story at:

https://malagen.shorthandstories.com/inside-the-securiprofit-deal/index.html

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