Why Djibouti is against to invest Berbera Port?
May 25, 2016 - Written by admin

By: Salebaan Sahal Jama

In 2006, DP World and the Djiboutian Government established a joint venture, with the signing of a 30 years concession to operate the Doraleh Container Terminal. That successful partnership led to the joint venture investment in the newly developed Doraleh container terminal.

Doraleh Container Terminal (DCT) is the most technologically advanced container terminal in the African continent. Just 11 km south of the International Autonomous Port of Djibouti, DCT enjoys the same strategic location at the crossroad of the main shipping lanes connecting Asia, Africa and Europe, but now Doraleh will face challenges come from Berbera port which will be a regional hub for Africa, if Somaliland and DP world Agreement will be a successful agreement.

DP World, which has a portfolio of about 65 terminals around the world, will cancel a 30-year concession to operate the Doraleh terminal in Djibouti, DP world’s cancellation is not a big issue according to Djibouti government but to invested Berbera Port, which located the same strategic place to Doraleh port is a most worst case scenario that Djibouti had ever heard.

Doraleh was a main gateway for oil imports into East Africa, as well as a transshipment point for goods moving between Asia, Africa and Europe. With an annual handling capacity of 1.2 million twenty-foot equivalent units, the terminal is the largest in East Africa now. However Berbera Port will be larger than Doraleh, after DP World invested to $442 Million.

DP World, which already has five operations in Africa, including in Egypt, Djibouti and Senegal will continue its operation in Africa, despite Djibouti will be out of the list, Somaliland the republic without recognition will replace the Djibouti government.

If Djibouti loses the DP World operations in Doraleh, it would be the second country which lays the Horn of Africa region that DP world canceled it after conflict. In September 2012, it announced it had sold its 50 per cent stake in the company managing the container terminal of the port of Aden in Yemen during unrest stage.

On the other hand, DP world is a major contributor to Djibouti’s economy according to DP World’s statement “We have invested significantly in Djibouti over those years and have been a major contributor to its economy and to its community.”

Ethiopia which was a customer to Doraleh port, welcomed to a historic agreement between Somaliland and DP World, but never expected to Djibouti because of the market competition between Djibouti port and Berbera Port.

Now the reality was revealed, that is why Djibouti is unhappy the agreement between Somaliland and DP world which based on to invest Berbera port.

Salebaan Sahal jama

Hargeisa, Somaliland

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