International Container Terminal Services Inc (ICTSI) has taken the decision to terminate its business in the Syrian Arab Republic through subsidiary, Tartous International Container Terminal (TICT), due to the ongoing civil war.
The company says that political unrest and violence made operations dangerous and unsustainable for TICT personnel. Prior to the announcement, all Filipino employees had already been pulled out of the country.
ICTSI says that the decision was also down to Tartous Port General Company’s (TPGC) refusal to acknowledge the existence of an unforeseeable change of circumstances and provide relief – a violation of the parties’ Investment Agreement which was signed in 2007.
To make matters worse, TICT also encountered policy setbacks from the Syrian government’s strategy on public-private partnership (PPP). Syria’s container market suffered, dropping by 4% in 2010 since ICTSI submitted its bid in 2005, and dropping by 14% by the end of 2011. The drop has set the Syrian market back five to six years at 2006/2007 levels, according to ICTSI.
To date, TICT has paid over US13m to TPGC in port fees and rentals. Writing off the contract and remaining net assets in the 2012 consolidated accounts of ICTSI amount to US$1.2m. In addition, ICTSI looks set to save US$4m annually by way of port fees and operating expenses.
ICTSI says that termination of its Syrian concession has no bearing on its other port concessions worldwide.
