DP world not afraid to “sail close to the wind”

The two latest deals that fall into this bracket were both announced in late October, namely, a joint venture company set up with Russian nuclear agency Rosatom to develop container shipping through the Artic and secondly the signing of a 30-year concession to operate Dar es Salaam port.

The deal with Rosatom involves the establishment of a joint venture company, International Container Logistics, registered on 20th October, with 51 per cent owned by Rosatom. It is anticipated that a major part of DPW’s role will be setting up the required port facilities and a possible involvement in container shipping in which it also has existing business interests. It is controversial as in mid-year this year, when it signed a preliminary agreement with Rosatom it attracted the ire of Ukraine’s National Agency on Corruption Prevention (NACP) which added DPW to its list of international sponsors of war, effectively it sanctioned the company in reputational terms. Specifically, NACP gives the reasons for its decision as DPW not only continuing to do business with Russia but also “strengthening its cooperation with the aggressor.”

NACP additionally highlights the forecast of Mikhail Mishustin, Russian Prime Minister, that the Northern Sea Route Project will bring an 20 trillion roubles (circa. US224 billion) to the Russian budget and underlines: “These additional funds will be used by Russia, among other things, to finance the war against Ukraine.” Further, it points out that it is Rosatom that since the Spring of 2022 has been responsible for holding hostage the largest nuclear powerplant in Europe, the Zaporizhzia nuclear power station.

It is clear that this new agreement with Rosatom places DPW at odds with the policies of many of the countries in which it has business units or is generally active.

Dar es Salaam Controversy
On the 22 October DP World, as has been reported previously in PS e-news, signed a 30-year concession with the Tanzania Port Authority (TPA) to operate and modernise Dar es Salaam Port. The overall stated goal underpinning the concession is to optimise operations to improve transport logistics services throughout Tanzania and its hinterland. Specifically, Makamwe Mbarawa, Transport Minister, Government of Tanzania, had previously highlighted the goal of raising port revenue from US3.3 billion a year to US$10.9 billion.

The deal signed, however, is in effect a watered-down version of the government-to-government deal originally proposed by Dubai to the Government of Tanzania – a deal seen as onerous (against the national interest) by a wide range of parties including the Catholic Church, lawyers, activists and opposition politicians. Such was the extent of feeling against this arrangement – intended to be for a much longer term and involving much wider ranging powers – that it triggered protests on the streets and resulted in a crackdown by government which saw 22 people arrested, according to Human Rights Watch.

The fact that the opportunity was not offered to the market on the basis of a competitive tender – the preferred route of such eminent authorities as the World Bank – was also integral to the protests for the usual reasons.

The deal just signed is understood to give DPW the right to operate berths 4 to 7 at Dar es Salaam Port plus as the arrangement unfolds opportunities in the areas of logistics, rail, temperature-controlled storage, a special economic zone with major emphasis initially on improving cargo clearance and planning processes.