The Dubai-based terminal operator says that despite its investments in the PT Terminal Petikemas Surabaya, the company will not renew its operating contract at the terminal once it expires in 2019.
DP World will no longer operate the terminal at Surabaya port once its operating contract expires in 2019.
Dubai-based terminal operator DP World has announced it will not renew its operating contract for PT Terminal Petikemas Surabaya (TPS) in Indonesia when it expires in 2019.
DP World holds 49 percent of TPS. However, “there will be no material financial impact on the Group as a consequence of this action,” the company stated.
DP World CEO Sultan Ahmed Bin Sulayem cited the company’s investment threshold as the motivator for no renewing the terminal contract.
“We have invested significantly in the terminal infrastructure, which has created jobs and contributed to the growth of both the port and the region. It is unfortunate that the significant positive contributions made by global terminal operators in Indonesia have not been fully recognized, despite our successful track record. We are therefore disappointed that the operating contract renewal terms offered by the Indonesian authorities did not meet our threshold for continued investment,” said the CEO.
“Adhering to strict financial discipline has been crucial to the growth of DP World and on that basis we are not able to renew the agreement beyond 2019. The transfer of operations will be in accordance to the terms and conditions of the contract,” he stated.
Sultan Ahmed Bin Sulayem went on to say that the company remains “committed to investing in Asia and all geographies that have an appetite for foreign direct investment.”