DP World chair says company to continue investing in Africa despite disputes
By Sarah Diaa
DUBAI: The head of DP World stressed on Thursday the company’s commitment to its investments in Somaliland, two days after Somalia reportedly said it was banning the ports operator from operating there.
Sultan Bin Sulayem, DP World Group chairman and chief executive officer, said that DP World will continue to invest in Somaliland in 2018, as part of up to $1.4 billion in planned capital expenditure for operations globally.
The dispute with the South African country began when Somalia said that a contract DP World has to operate in the breakaway Somaliland was null and void. But Bin Sulayem pointed out that Somaliland has been independent for the past 28 years and has its own agreements with several companies and countries.
Asked about a vote on the issue by the Somali parliament, he said: “It [the vote] doesn’t really concern us because the Somali parliament … can only make noise and put statements, but on the ground, Berbera actually has agreements with many countries around the world, with many companies, and it is within their laws.”
Commenting on Djibouti, where DP World is facing a similar issue after the government there illegally seized control of the Doraleh Container Terminal, Bin Sulayem said, addressing the reporters in Dubai, that the company is currently in an arbitration process with a London court. A Dubai Ports World-owned entity designed, built and has operated the terminal pursuant to a concession awarded in 2006.
He described actions taken by the government of Djibouti as “unfortunate” and “illegal,” further stressing the company’s continued commitment to investing in Africa despite both actions.
“For Africa as a continent, this action [by Djibouti’s government] is going to set them back. If countries can change their policies, it is going to make it more difficult to attract investments in Africa in general. Banks will be very careful in financing in Africa,” he said.
Djibouti’s government said it was terminating the contract because of a failure to resolve a dispute that began in 2012. The government also accused DP World of using “aggressive tactics such as deliberate slowing” of the development.
Asked if there was more to the termination by Djibouti’s government than commercial reasons, Bin Sulayem said the “government is getting the wrong advice,” and that agreements should be respected.
He described Africa as a “very important market” for DP World and highlighted the importance of ports in Djibouti and Somaliland in facilitating trade into and out of Ethiopia, a landlocked country with growing demand and a growing economy.
The chairman was unfazed by the risk Africa presented and said there is a risk with investing anywhere.
Bin Sulayem said DP World is also still looking at investing in Kenya, particularly in the coastal city of Mombasa, but was waiting on the government to finalize decisions on privatization.
Away from Africa, the ports operator is eyeing expansion in Russia where it already has a presence. The CEO described the Russian market as “a very important one” given the sustained strength of the country’s economy.