DP World deal to develop Berbera Port to go ahead as planned

Issac John /Dubai


The President of Somaliland on Friday dismissed Somalia’s move banning the UAE ports operator DP World from developing Berbera Port, saying Mogadishu has no jurisdiction over the matter.

“Somaliland is an independent sovereign country with a long democratic tradition. We will not allow any outside forces to interfere in our internal issues,” President Muse Bihi Abdi said in Dubai.

Abdi, who was accompanied by five ministers, told the media that there is “no authority other than the elected representatives of the country to decide on its internal affairs.

He said the agreement signed between the UAE ports operator DP World and the Ethiopian Government to acquire a 19 percent stake in Berbera Port is lawful and binding. “As a sovereign and independent state, Somaliland has right to enter agreements, and does not allow others to meddle with its rights.”

Asked what would happen in a worst-case scenario of Somalia sticking with its position of denouncing the port deal, terming the tri-party agreement unconstitutional, null, and void, Abdi said: “nothing will happen.” The project will go as planned and will be completed within two years, he added.

The Parliament of Somaliland approved the partnership with DP World in 2016, paving the way for the UAE’s port operator to invest $442 million to rebuild the Port of Berbera and manage it through a 30-year concession. Recently, both countries agreed to give 19 percent stake in the project to Ethiopia.

The president said the present agreement is nothing new. “It is an extension of the agreement entered into between the Republic of Somaliland and DP World and approved by the parliament.”

Abdi said since Somaliland’s union with Somalia did not work, his country decided to stay out of the union in May 1991. “Since then, Somaliland has succeeded in building a democratic, stable state where people elect their president and parliament in free and fair elections. It has the constitutional right and the capacity to enter into treaties and agreements with other nations and international companies which it does. Somalia has no jurisdiction over Somaliland, which is a sovereign state,” said Abdi.

Minister of Foreign Affairs and International Cooperation Dr. Saad Ali Shire said it was very unfortunate that Somalia’s parliament is trying to create a controversy over the issue despite all problems the country faces. They are trying to block a development which is needed by every country in the continent, including Somalia.”

On Thursday, DP World, which is also embroiled in a separate dispute over its operations at the Port of Djibouti, said it is committed to the Somaliland port agreement and is going ahead with the development as planned. DP World Group Chairman and CEO, Sultan Ahmed bin Sulayem, said the Dubai-based ports operators is concerned by the decision by the Somalia parliament.

Last week, the Somali Ministry of Ports and Marine Transport said Mogadishu was not a party to the agreement which it termed as defective. “This so-called agreement is both defective and detrimental to the sovereignty of the Federal Republic of Somalia and the unity of the country,” the Ministry said.

Somalia’s Upper House of Parliament on Thursday approved legislation banning the UAE ports operator DP World from operating anywhere in the Horn of Africa country. The new bill awaits now the ascension of the President of the Federal Government of Somalia, Mohamed Abdullahi Farmajo who will sign it into law that finally forces the DP World out of Somalia.

The Somalia parliamentary vote comes about a week after Somaliland hit back against the Somalian prime minister’s March 2 statement declaring “null and void” a deal by the region and DP World to grant a stake in the Port development to Ethiopia.

According to the original deal announced on March 1, Ethiopia will become a 19 percent shareholder in the Port of Berbera, with DP World controlling 51 percent stake in the project. Somaliland will hold the remaining 30 percent. The government of landlocked Ethiopia will also invest in infrastructure to develop the Berbera Corridor as a trade gateway to the port, according to the agreement.

Mogadishu, however, is contesting the manner in which the deal was reached between. The Somalian Ministry of Ports and Marine Transport dismissed the agreement as “defective” in a statement in the first week of March, saying the Somalian government was not party to the agreement.

Development of the Berbera corridor is expected to address some of the region’s most pressing employment and investment issues. DP World plans to build an additional berth in line with the Berbera masterplan as part of its concession agreement, and earlier this month said it had signed the final agreement with the Government of Dubai to develop a 12 square kilometer greenfield economic free zone in Somaliland to complement growth of the port.

Issac John

Associate Business Editor of Khaleej Times, is a well-connected Indian journalist and an economic and financial commentator. He has been in the UAE’s mainstream journalism for 35 years, including 23 years with Khaleej Times. A post-graduate in English and graduate in economics, he has won over two dozen awards. Acclaimed for his authentic and insightful analysis of global and regional businesses and economic trends, he is respected for his astute understanding of the local business scene.

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