DP World denies reports of offer to buy its stake in Djibouti terminal
Media reports had said Djibouti wants to buy the 33 per cent stake
DP world, the world’s fourth-largest port operator, has denied media reports that it had received an offer from Djibouti to buy its 33 per cent stake in a terminal that is currently under dispute between the Dubai company and the African country.
Djibouti Ports and Free Zone Authority chairman Aboubakar Hadi told Reuters on Tuesday that the country is prepared to buy DP World’s stake in Doraleh Container Terminal. Last month, Djibouti cancelled DP World’s contract to run the terminal, a move that the operator said was illegal, prompting it to initiate legal proceedings against the African nation.
“Contrary to recent newspaper reports the government of Djibouti have not offered to buy our 33 per cent shareholding in Doraleh Container Terminal,” said a DP World spokesman. “As we have stated throughout, the aggressive action taken by the government of Djibouti is illegal, which is why we have filed our case to the Court of International Arbitration in London.”
Besides Djibouti, DP World faces hurdles in its operations in Somaliland, a semi-autonomous region in northern Somalia. Earlier this month, Somalia’s Lower House voted to reject a deal by Somaliland and DP World to grant a stake in the Port of Berbera to Ethiopia, aggravating a row between the central government in Mogadishu and Somaliland.
A DP World-owned entity had designed, built and operated the Doraleh terminal after winning the concession in 2006.
“Any party entering into any agreement or arrangement with the Djiboutian government in respect of Doraleh Container Terminal, or other container and port concessions over which DP World also holds exclusive rights, risks being liable in damages for interfering with DP World’s rights under its contract, which remains in force,” the spokesman said. “We consider such action to be illegal, and will pursue our legal rights against any such third parties.”
Despite its woes in Djibouti and challenges in Somaliand, DP World continues to expand in Africa. Earlier this month, the company won a 30-year concession to develop a $1 billion deep-water port along the Democratic Republic of Congo’s Atlantic coast. DP World will get a 70 per cent stake and the DRC government keeps a 30 per cent holding in the project. Construction will start this year and finish in two years.
The Nasdaq Dubai-listed company handled 10.1 per cent more in gross container volumes on a reported basis in 2017 over the previous year and expects the volume expansion to continue in 2018. In the fourth quarter, volumes grew 10.3 per cent year-on-year on a reported basis. Growth on a reported basis includes new terminals.
DP World expects to spend about $1bn every year for the next three years as it increases investment, adds capacity and acquires new assets to strengthen its global footprint, its chairman and chief executive Sultan bin Sulayem told The National in January.
Updated: March 29, 2018 04:33 PM