Ratification of a Contract Signed between the Port of Tartous and a Russian Company
Damascus-The People’s Assembly (PA), at its 14th session of the 10th ordinary session of the second legislative session, chaired by Hammouda Sabbagh, the PA Speaker, approved today a draft law, which includes the ratification of the contract signed between the General Company of Tartous Port and the Limited Responsibility Russian company STG Engineering for the management and investment of Tartous port.
The draft law is based on the cooperation protocol of the 11th session of the Joint Syrian-Russian Committee, which held its meeting in mid-December 2018 regarding the administration of the civil section of Tartous Port. The contract was signed by mutual consent on 28/4-2019.
The contract includes that the second party, STG Engineering Company, will be exempted from the customs duties of introducing the machines, equipment and materials used to implement the object of this contract. This exemption also applies to the temporary importation of vehicles required for the project according to the lists provided by the second party. The exemption also includes all types of taxes and fees in force in Syria from the moment of receipt of the subject of the contract until the end of the expansion of Tartous port project and no more than six years the period of expansion.
The contract also provides for the formation of a board of directors consisting of six members, three from the first party and three from the second party, including the president. The council was granted the authority to set the port tariff and amend it contrary to the provisions of the Syrian Ports Investment Law issued by Decree No. 67 of 2002 and the provisions of Law No. 2 of 2005 regarding companies and public establishments of an economic nature that requires the ratification of the contract under a legislative instrument decree..
A number of members of the PA considered the law, which consists of two articles in support of the Syrian economy and national interest and an important step for the next phase of reconstruction, as it achieves the actual need to develop the services of Tartous port and enables it to compete with other ports.
The head of the services committee Safwan al-Qirbi that the contract allows the establishment of large vessels with guaranteed costs from the Russian state within a specified time period of 6 years with guaranteed profits to the Syrian state according to revenue.
Minister of Transport Ali Hammoud explained that the investment contract with the Russian company is ideal for the port to benefit from its strategic position and achieve a profitable return and to be an economic and commercial investment gateway for Syria on the Mediterranean especially in light of the competition we are witnessing with the ports of neighboring countries within 49 years..
Minister Hamoud pointed to a number of benefits included in the contract, mainly the profit of 25% of revenues regardless of expenses. The ratio increases with the increase of production to 35%. He also mentioned that it is also worth pumping $ 50 million to develop the current port
and establish a new port with a production capacity of 40 million tons instead of 12 million tons and 2.5 million containers instead of 400.000 containers currently and with depths of up to 18 m.
The Minister of Transport explained that the contract transfers the port management to the Russian company and not its ownership. The Russian company is not authorized to assign to a third party or to participate in the investment in whole or in part except with the approval of the Ministry of Transport in Syria without providing additional services without obtaining prior approval from the Syrian side, Pointing out that the Syrian side is not responsible for the damages caused to others as a result of the implementation of this contract, the insurance of the port and all its requirements are done with a Syria insurance company and the arbitration is done at the State Council in Syria according to Syrian law.
Sh. Kh.