UAE’s state-run enterprise, DP World, gained a new partner in the government of Ethiopia as the port developer and the Somaliland Port Authority reached a deal, Trade Arabia reported. The agreement was made official between the shareholders effective March 1. This came as DP World lost its docks at at Port Doraleh in Djibouti to a nationalization program executed through a presidential decree.
Ethiopia’s stake in the project is reported at 19% while the Republic of Somaliland has 30% stake and DP World the remainder. Part of the investment will be used to develop Somaliland’s Berbera Corridor into a trade hub and take advantage of the progress in this side of the horn of Africa. The rest of the fund will be used to fund/build another berth at the Port of Berbera. DP World has added new equipment to the port to make it more productive while waiting for the port’s first batch of cranes to arrive in late 2018.
Somaliland’s Minister of Foreign Affairs and International Co-operation, Dr. Saad Al Shire, said the investment in the Berbera development is because “the economies of the region are growing at a pace that necessitates the development of multiple ports and outlets. The extension of the port will increase capacity of the region to accommodate the increase in trade.”
Ethiopia’s Transport Minister, Ahmed Shide, echoed the optimistic vision that Al Shire has towards DP World’s latest investment. “The agreement will help Ethiopia secure an additional logistical gateway for its ever-increasing import and export trade driven by its growing population and economy.” Shide pragmatically added though that “Ethiopia will continue to further invest in and develop the Djibouti corridor and further consolidate the use of existing ports in Djibouti.”
DP World’s CEO Sultan Ahmed Bin Sulayem was delighted to welcome the Ethiopian government to the fold. “Ethiopia is home to approximately 110 million people. The ports of Berbera and Doraleh will provide significant capacity to the region. Both these ports and more capacity will be needed to serve the region’s growth potential in the future.”
Doraleh remained a contested issue according to DP World. The company released a statement in condemnation of the alleged takeover. “The illegal seizure of the terminal is the culmination of the government’s campaign to force DP World to renegotiate the terms of the concession.”
DP World then revealed that it would contest this move by the government of Djibouti in the UK, in “the London Court of International Arbitration to protect their rights, or to secure damages and compensation for their breach of expropriation.”
Stay up-to-date with the latest commentary and insights on FreightTech and the impact to the markets by subscribing.
