Dubai’s DP World Agrees to Manage Port in Somaliland for 30 Years

somalilandersDubai’s DP World has agreed to manage the Somaliland port of Berbera in a landmark deal this month that opens a new point of access to the Red Sea and gives the global ports operator an alternative hub to Djibouti in the Horn of Africa.

Under the terms of the concession agreement, according to a person who has seen the document, Somaliland will grant the Dubai-based company the right to manage the Red Sea port of Berbera for 30 years.


Sultan Bin Sulayem, DP World’s chairman and chief executive, portrayed the port as a future magnet for shipping to east Africa, which that would spur regional economic growth.

“Investment in this natural deep water port will attract more shipping lines to East Africa and its modernization will act as a catalyst for the growth of the country and the region’s economy,” he said.

The deal, the company said, was also part of a broader strengthening of ties between Dubai and the Somaliland government.

Dubai and Somaliland also signed a memorandum of understanding, according to the person, under which Dubai will support Somaliland’s fisheries industry; help build the road between Somaliland and Ethiopia; build a four-star hotel in either Hargeisa, the capital of Somaliland, or Berbera; and grant Somalilanders favorable migration terms so they can work in Dubai.

The ambitions of Dubai, which is a part of the United Arab Emirates, in the Horn of Africa have run into trouble over the past year. The country left an air base it was leasing in Djibouti after a dispute with the government there—opting to lease another base in Assab in neighboring Eritrea, a remote state under United Nations sanctions for supporting armed groups in neighboring Somalia.

“Geopolitically, the contract appears to be a result of the recent cooling of relations between the U.A.E. and Djibouti, as well as sensitivity to Ethiopian concerns about recent engagement in the Eritrean port of Assab,” said Matt Bryden, executive chairman of Sahan, a Nairobi-based think tank.

“Berbera represents a pragmatic compromise, providing a friendly corridor for Ethiopian markets while signaling that Djibouti—though by far the most developed gateway to the Horn of Africa—will no longer enjoy a de facto monopoly over trade with the region’s landlocked markets,” Mr. Bryden added.

Another driver for the Berbera deal may be a long-running dispute surrounding DP World’s port in Djibouti, the largest container terminal in Africa.

The Djibouti government accused DP World in 2014 of paying bribes to the former head of its ports authority, Abdourahman Boreh, to secure a concession to operate the Doraleh Container Terminal in 2000. Djibouti revoked DP World’s 20-year concession and launched an arbitration case in London.

DP World has denied the allegations, and a U.K. court found in March that Mr. Boreh didn’t take bribes. DP World has continued to manage the port as the legal proceedings continue.

Having an alternative port under development nearby could put DP World in a stronger position in Djibouti, said Sanyalak Manibhandu, an analyst at NBAD Securities in Abu Dhabi.

“It’s a leverage that they hold over Djibouti as well,” he said….Read more


Courtesy: The Wall Street Journal

Short URL: http://somalilandembassy.com/?p=763

Posted by on May 29 2016. Filed under Ciyaaraha, Current Affairs, Fikradaha/Opinions, FYI, Heeso/Music, News In English, Wararka. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry

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