US embassy cable - 03DJIBOUTI1660

UNCLAS SECTION 01 OF 04 DJIBOUTI 001660 
 
SIPDIS 
 
DEPT FOR OBO - ATTN THOMAS GRUBB 
 
E.O. 12958: N/A 
TAGS: ABLD, AMG 
SUBJECT: DJIBOUTI NEC SITES - RESPONSE TO ASSEMBLY OF 
RELEVANT INFORMATION 
 
REF: A) State 088579, B) State 237442 
 
1.  Post researched the topics raised in ref. B) and 
provides the following responses. 
 
2.  REAL ESTATE 
QA.  Is Fee Simple land ownership available to the USG ?  If 
not, what other types of land interests are available ?  If 
a Crown lease or similar long-term lease is available, how 
long is the usal term ?  Are such leases automatically 
renewable ?  At what cost, if any ? 
 
3.  AA:  The average land ownership fees are Djibouti Franc 
(DF) 5,000 m2 in the area near the airport as well as in 
Heron, provided one deals directly with the Ministry of 
Finance.  However, the fees could go up to DF 10,000/m2 in 
areas such as Heron if one buys from a reseller.  Mr. 
Ibrahim Hamadou is the Director of Ministry of Finance. 
 
4.  QB.  How well does the Land Registry System work there? 
Are the records regarding land ownership reliable and 
accurate ? 
 
5.  AB:  The Land Registry System works well, through 
Ibrahim Hamadou's department.  The records regarding 
ownership are reliable and accurate. 
 
6.  QC:  Is there known corruption in that office ?  Can a 
prospective buyer expect that a true past and present 
ownership record obtained from this office is correct and 
not likely to be successfully challenged by a third party ? 
Is there known corruption within the real estate market or 
industry ?  If so, please describe how it might be 
encoutered by the USG and offer suggestions on how to avoid 
it. 
 
7.  AC:  Post cannot guarantee that corruption does not 
exist.  Post suggests dealing directly with the host 
government unit in charge of the process.  A prospective 
buyer can expect that a true past and present ownership 
record obtained from the Land Registry System is correct and 
not likely to be challenged by a third party. 
 
8.  QD:  If a use or zoning change becomes necessary for the 
selected site, please describe the government office 
involved and the general process for affecting the change. 
How cumbersome is the process ?  Is the 
government/municipality cooperative or adversarial ? 
 
9.  AD:  If a use or zoning change becomes necessary for the 
selected site, please coordinate with the Director of the 
Ministry of Finance (Ibrahim Hamadou).  He should be 
cooperative. 
 
10.  QE:  Generally, what is the condition of the real 
estate market ? Is it stagnant or robust or somewhere in 
between ? 
 
11.  AE:  The real estate market is high since Djibouti is 
involved in the anti-terrorism campaign with the presence of 
American, German, and other growing military and diplomatic 
missions present in country. 
 
12.  QF:  What is currently influencing supply and demand, 
such as geography, investment in infrastructure, interest 
rates, civil unrest, labor costs etc. 
 
13.  AF:  Djibouti's strategic geographical location and 
relative political stablity in an otherwise highly unstable 
region account for the present influx of foreigners, 
particularly Americans.  Its port remains Ethiopia's 
principal sea access, in the wake of Ethiopia's war with 
Eritrea which closed off Asab.  The present expulsion of 
undocumented foreigners will cause labor costs to increase 
markedly.  Construction must be earthquake proof.  Interest 
rates are high.  More generally, the real estate market in 
Djibouti is very small.  The Ministry of Finance indicated 
that most of the land in the town of Djibouti is privately 
owned.  Therefore, the supply of land is very limited 
irrespective of considerations such as geography, investment 
in infrastructure, etc.  Many people invest in land without 
having necessarily the means to build.  The demand for 
housing is influenced by a growing population eager to own 
property.  The government has set priorities in social 
housing programs. The Djiboutian government exercises a 
strong influence on determining available real estate supply 
in Djibouti city. 
 
14.  QG:  Is land available ?  Are vacant 10-acre parcels 
likely to be available within a reasonable commuting 
distance from where Post does business ?  Generally, what is 
happening there with various types of real estate ? 
 
15.  AG:  The land available around the Embassy-and in 
particular the price-is not completely clear at this point. 
There are three lots surrounding the Embassy (fourth side 
faces the water).  On the south side, there is an empty lot 
covering 8,464 m2 which is owned by the Saudi Arabian 
diplomatic mission.  They have not built on the lot and are 
aware of the possible need for the American embassy to 
expand.  No selling price has been made and it would not be 
surprsing if they asked for a high price given the lot's 
market value.  It is rectangular in form. 
 
16.  On the north side, along the beach front, is a lot 
belonging to the Railway Company and currently used by the 
Constitutional Committee.  There is a medium sized colonial 
style house on the land that is in fair condition.  The 
Ministry of Finance indicated this lot of 6,641 m2 is 
negotiable if the USG is interested.  A side street 
separating the embassy compound and the lot exists and is 
controlled by the embassy (rue d'Alexandrie).  It is 
rectangular in form. 
 
17.  Finally, there is the lot across from the embassy, 
known as `Soleillet' which covers 2,800 m2.  This includes 
an abandoned, dilapidated building of 22 apartments and a 
parking space behind the construction.  No price has been 
offered but it is subject to negotiation with the Ministry 
of Finance, Ibrahim Hamadou. The building would have to be 
demolished.  Moreover, if this site were selected, the 
street running in front of it and separating the lot from 
the embassy compound (Boulevard Marechal Joffre) would 
probably have to be preserved.  An underground path, small 
bridge or other structure would probably be necessary to 
communicate with the embassy compound.  The lot has, on one 
side, a street on which different organizations and 
residences are located.  That street leads to the open field 
of Plateau du Serpent where Djiboutian city dwellers would 
be evacuated and assembled in case of an emergency. 
 
18.  These three lots taken together with the embassy 
compound (15,400 m2), make for a total surface area of 
17,905 m2.  The shape of the combined lots would be in two 
segments : one large, uninterrupted rectangle with a beach 
front on one side, Boulevard Joffre on the other.  The 
second segment is a rectangular lot directly across from the 
embassy and over Boulevard Joffre.  The Government of 
Djibouti would strongly resist closing Boulevard Joffre. 
 
19.  Vacant 10-acres parcels are also likely to be available 
in the district of Haramous with presidential approval. 
Haramous is a reasonable commuting distance from where post 
does business (approximately 20 minutes away from the main 
town), although not nearly as convenient as the present 
chancery.  Security considerations would make this option 
unfavorable if chosen lots were in relatively isolated 
areas. 
 
20. LOCAL SERVICE PROVIDERS 
QH:  How available are technical services ?  Are there 
qualified engineering firms for geotechnical, civil, 
environmental surveys ? 
 
21.  AH :  The technical services are available via the 
Ministry of Equipment and Transportation. Engineering for 
geotechnical, civil, environmental survey is managed by Dr. 
Alexandre Adam, Director of the Central Laboratory of 
Building and Equipment, Tel/fax 35-11-68, BP 2372 Djibouti. 
 
22.  QI:  Are there reputable law firms ?  Please supply the 
names and addresses of three (3) attorneys (one will be 
hired soon). 
 
23.  AI:  Martinet & Martinet 
Mr. Alain Martinet et Marie Paul Martinet 
Le Heron rue de Khartoum 
BP 169 
Djibouti 
Tel: 35-28-79 
Fax: 35-25-43 
Email:martinet@intnet.dj 
 
Maitre Jean Montagne 
Rue de Pekin 
BP 177 
Djibouti 
Tel: 35-21-51 
Tel: 35-13-29 
Email: montagne@intnet.dj 
 
Maitre Hasna Barkat Daoud 
Rue de Marseille near le Kintz 
BP.1462, Second Floor 
Djibouti 
Tel: 35-73-74 
Cell. 81-57-57 
Email: cabinethasnabarkat@intnet.dj 
 
24.  QJ.  Are there known and reputable firms that work with 
host government or municipal officials on issues like town 
planning and zoning. 
 
25.  AJ:  No. Private firms get involved in the planning and 
zoning unofficially.  The Ministry of Habitat, Urbanism, the 
Environment and Land Use decide who and where land can be 
bought.  Point of Contact : 
Mrs. Amina Abdi, Director 
BP: 11, Djibouti 
Tel: 35-60-34 - 35-16-91 
Fax: 35-16-16-18 
 
26.  There is also the Ministry of the Economy, Finances and 
Planning, Head of Privatization. 
Direction for Revenues and Estates, Ibrahim Hamadou, 
Director. Tel: 35-3908. Fax: 35-65-87. 
 
27.  LANGUAGE 
QK:  Do government/municipal officials and employees speak, 
read and write English ? If not, what is the common business 
language ? 
 
28.  AK:  The common business language is French. 
 
29.  QL:  Are good translators easily available ? At what 
cost ? 
 
30.  AL:  Oral translators yes, written translators are 
available but less numerous.  Oral translators receive about 
U.S. $20-30 per hour. 
 
31.  UTILITIES 
QM :  In general, please describe the city's infrastructure 
and the relaiabilty of each utility : water, power, 
sewerage, gas, telecommunications. 
 
32.  AM:  It is fair to say that the water utilities are 
generally reliable with some shortage during summer. 
Investment is currently focused more on finding new water 
sources than improving the water distribution system. 
 
33.  The power utilities use fuel energy so electricity is 
quite expensive.  However, there has been investment in 
purchasing more generators, which has caused power outages 
to decrease to a few hours per month during summer and 
almost no outages during the cool season. 
 
34.  A few years ago, the government of Djibouti invested in 
a system for evacuation of rain water.  However, the 
sewerage system is rudimentary and not reliable. 
 
35.  Djibouti enjoys one of the best telecom systems in the 
region.  It is reliable but expensive. 
 
36.  QN :  Identify the companies/government agencies that 
provide and manage utilities and provide contact names and 
telephone numbers for each one. 
 
37.  AN: Water - Office National des Eaux 
BP.1914 
Djibouti 
Tel: 35-31-07 
Fax: 35-44-23 
Mr. Abdoulkader Kamil Mohamed, Director General 
Mrs. Zeinab Kamil Ali, Directrice Adjointe 
 
38.  During summer we run out of water. 
 
39.  Power - Electricite de Djibouti 
BP.175 
Djibouti 
Tel: 35-28-51 
Fax: 35-43-96 
Mr. Djama Ali Guelleh, Directeur General 
 
40.  Djibouti faces power outages of few hours in summer. 
 
Telecommunications: Djibouti Telecom 
3 Blvd Georges Pompidou 
Djibouti 
Tel: 35-11-10 
Fax: 35-57-57 
Mr. Mohamed Kamil Ali, Directeur General 
 
41.  Djibouti telecom provides the following service: 
telephone, mobile phone, internet, telex.  These services 
are reliable but expensive. 
 
42.  QO:  Please advise if the City has any known public 
works projects planned or underway that affect the supply, 
capacity or future of utilities. 
 
43.  AO: None known. 
44.  OTHER PUBLIC SERVICES 
QP:  Is there adequate public transportation throughout the 
city ? If not, what parts are best served ?  Worst served ? 
Is it considered safe, reliable, and affordable ? 
 
45.  AP:  Public transportation in Djibouti is inadequate 
and risky.  Taxi cabs exist and are relatively inexpense, 
but they are not considered safe or reliable. 
 
46.  QQ.  What is the general status and availability of 
police protection ?  What is the general status and 
availability of fire protection ? What is the general status 
and availability of paved primary, secondary and tertiary 
roadways ? 
 
47.  AQ:  Police protection in the more populated areas is 
generally available.  The Police can be unreliable and 
subject to extortion and other forms of corruption. 
 
48.  Fire protection is somewhat good, but unreliable due to 
qat-chewing that weakens the responsiveness of firemen. 
 
49.  The primary road system is adequate but speckled with 
potholes and in need of maintenance.  The secondary roads 
are impaired and sometimes impassable.  Tertiary roads 
require 4WD vehicles to pass.  Large washouts, rock slides, 
and other obstacles frequently block these roads. 
 
Regards. 
 
SMITH