Somalia frantically searching for debt collectors to retrieve $30M from Kenyan airlines!
Tuesday May 23, 2023
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Hold on to your hats, folks. The Federal Government of Somalia is blazing a new trail in reclaiming its airspace and recouping millions lost in unpaid fees. In a gutsy move, the government has begun to collaborate with international debt collection agencies in the hopes of recovering over $30 million in unpaid overflight fees. Regional airlines, like those based in Kenya, are the worst offenders, constituting over 60% of outstanding fees.
It’s a knotty predicament that has led to unpaid bills accumulating over time from a plethora of local and international airlines and aircraft charter companies. These fees have gone unclaimed for a variety of reasons, ranging from administrative oversights to stubborn non-compliance or long-standing disputes over payment structures.
The terms of this proposed debt recovery contract spell no-win, no-fee – aligning financial gain only with successful debt recovery.
Would-be applicants for this lucrative contract must prove their status as a legitimate collector of debts, be capable of operating both domestically and internationally, and demonstrate financial stability corroborated by two years of financial statements with a minimum annual turnover of $2M. They must also show five years of prior international debt collection experience in various jurisdictions, as well as provide three references of satisfied clients from the last three years. Lastly, the applicants must declare any law firms they plan to partner with in Kenya and, significantly, Somalia, thus indicating Somalia’s intention to single out Kenyan carriers in the crosshairs.
The government plans to move at breakneck speed in addressing this matter, with closing expressions of interest expected to end on May 24, request for proposals due on June 2, and the contract awarded by July 26.
This debt recovery endeavour follows hot on the heels of a significant victory in Somalia’s airspace. After three long decades, the International Air Transport Association (IATA) has upgraded Somalia’s airspace to Class A status in January.
With Somalia once again in control of its airspace, the government aims to increase revenue, create employment opportunities, and improve safety measures. With about 400 international flights daily traversing Somali airspace, this number is predicted to surge to 600 flights following Class A reclassification, promising an income increase of at least $10 million annually.