…and signs deal for Berbera port

News-in-print 1 Sep 2016 by WCN Editorial

DP World has won a 30-year concession, with an automatic 10-year extension, for the management and development of a multipurpose port project at Berbera, in the self-styled Republic of Somaliland. Located on the south side of the Gulf of Aden close to Djibouti, Berbera “opens a new point of access to the Red Sea, and will complement our existing port at Djibouti in the Horn of Africa,” stated DP World.

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Sultan Ahmed Bin Sulayem, chairman and CEO of DP World, said: “Berbera will contribute to our continued growth in the developing markets of Africa in the years ahead. It is also a breakthrough in developing access to the sea for landlocked Ethiopia, the region’s largest economy.”

But this is what DP World is supposed to be doing in Djibouti. It remains to be seen whether the government of Djibouti – which earlier this year lost its two-year battle to abrogate DP World’s control of Doraleh Container Terminal (WorldCargo News, March 2016, p1) – sees Berbera as ‘complementary’ to its transit/entrepôt status for Ethiopia.

However, DP World was involved in talks over Berbera while the Djibouti case was underway at the International Court of Arbitration in London, and the operator might have anticipated losing it.

The deal follows a Term Share Agreement reached earlier this year, and confirms that DP World has ousted Bolloré, the long-time favourite that was originally reported to have won a concession at Berbera almost six years ago, and is a firm advocate of a Berbera-Ethiopia transit corridor. In the event, Ethiopia and Somaliland signed a transit trade agreement at the end of March this year.

The Republic of Somaliland, with its ‘capital’ in Hargesia, is not internationally recognised as an independent state, but is recognised as an “autonomous region” of Somalia.

The new joint venture will be 65% owned by DP World, which has signalled an investment of up to US$442M. This will include a first-phase 400m quay and 25-ha CY, with gantry cranes and reach stackers to handle containers and general cargo. Construction of the quay extension is expected to start 12 months after “the satisfaction of the terms and conditions of the agreement”, and will take 24 months to complete.

The project will focus on containers, with the capability to handle other types of cargo too, and will be implemented with the “government of Somaliland”.

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This complete item is approximately 300 words in length, and appeared in the September 2016 issue of WorldCargo News, on page 14. To access this issue download the PDF here.