After Djibouti failure, DP World heads up Somalia for controversial port projects
GAROWE, (GO) - Iconic freight heavyweight DP World is now eyeing massive investments in the federal republic of Somalia after failing to stamp authority in Djibouti, where it had received a mega contract for the Doraleh Container Terminal in 2018, which was described as life-changing for the Horn of Africa region.
About seven years ago, Somaliland signed a 30-year contract to develop the historical port of Berbera along the Gulf of Eden which was to cost around $442 million. In the contract, DP World was to own a 51 percent stake after the deal is completed, something which would take some time before their exit.
Equally, Somaliland and landlocked Ethiopia were to own 30% and 19% stakes respectively. But in 2017, P&O, a subsidiary of DP World, signed a 30-year concession to manage and develop a project at Bosaso in the Puntland State of Somalia.
The $330 million deal has not yet been implemented, causing political ripples in the northern state of Somalia.
Bosaso lies on the Gulf of Aden. Now, DP World eyes investment in Africa’s first community-built Gara’ad port which was inaugurated in September this year.
The Construction of the Gara'ad port project envisages to be a marine gateway that connects Central Somali and Eastern Ethiopia, experts note. The community-owned port is believed to be instrumental in shaping the economy of both Somalia and Ethiopia, a landlocked country that has been using the Port of Djibouti.
The President of Puntland Said Abdullahi Deni, acting on UAE demand went to the town of Gara’ad this week to convince the local people to give free zone land to the DP World company. Sources tell Garowe Online that the people rejected the President of Puntland’s request.
This port is community funded and the local people are afraid that the DP world will prevent other funding from other rival countries. Members of the community told Garowe Online that they asked the president of Puntland that they will not give land to DP World and enter a deal with it as the company failed in fulfilling the Bosaso port contract.
DP World wants to control all Somalia ports as it faces competition from Qatar, Turkey, and China. The company which manages Berbera and Bosaso ports is now moving to take over Kismayo port in the Jubaland state of Somalia. The strategy is believed to be benefiting a few people in society at the expense of people.
Critics believe that DP World, which gives a lot of money to the Somali leaders for the Bosaso port agreement, is preventing other companies from entering deals with the Puntland government because they have spent a lot of money. Berbera port and Bosaso are located in the Red Sea.
Said Abdullahi Deni is now pushing for the extension of his term, leading to discomfort from a number of politicians in Puntland who accuse him of dictatorial tendencies. His association with DP World is set to trigger a fresh storm that would effectively challenge the stability of the region.