Somalia dismisses Port of Berbera deal

Port of Berbera DP World last week stated Ethiopia would take a 19% stake in the Port of Berbera. Image courtesy of Lakmi00/ Wikimedia
Industry Database

A Port of Berbera investment deal between DP World, the state of Somaliland and Ethiopia has been declared “non-existent, null and void” by the Federal Government of Somalia.

DP World last week stated Ethiopia would take a 19% stake in the Port of Berbera in Somaliland, following the signing of an agreement with DP World and the Somaliland Port Authority which would see the former hold a 51% stake in the project and the latter 30%, but Somalia said the deal was unlawful.

The Ministry of Ports and Marine Transport said it is not party to the agreement, calling it “both defective and detrimental to the sovereignty of the Federal Republic of Somalia and the unity of the country.”

It added the terms of the deal “contravene procedure and are in blatant breach of the Provisional Constitution Somalia.”

Enabling growth

Following the deal, group chairman and CEO Sultan Ahmed Bin Sulayem, said: “The ports of Berbera and Doraleh will provide significant capacity to the region. Both these ports and more capacity will be needed to serve the region’s growth potential in the future.

“Having the Government of Ethiopia as a partner will enable DP World to support the Government in achieving its impressive development plans.”

Ethiopian Transport Minister Ahmed Shide, said the deal was expected to support its growing import/export trade, while it is thought it could help develop boost employment and investment in Somaliland.

In 2016, DP World signed an agreement with the government of Somaliland to co-invest US$442m in the Port of Berbera.

DP World said there are plans to construct an additional berth at the Port of Berbera, in line with the Berbera master plan, which it has already started implementing, while adding new equipment to further improve efficiencies and productivity.

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