Djibouti's action vs DP World to be a big setback for Africa

Dubai - Government is getting wrong advice: Bin Sulayem

Djibouti's controversial decision to abruptly end a contract with DP World to run its Doraleh Container Terminal will have implications on African continent's ability to attract foreign investments, the CEO of the global ports operator said on Thursday.
"This action by Djibouti is a setback for Africa to attract global investment. Banks will now be extra careful in financing projects in African countries," DP World group chairman and CEO Sultan Ahmed bin Sulayem said.
Speaking to reporters, Bin Sulayem said he could not make any further comments as the dispute is under arbitration process in London. DP World has called the Djibouti move illegal and said it had begun proceedings before the London Court of International Arbitration, which last year cleared the company of all charges of misconduct over the concession.
"Africa needs infrastructure investments and if countries can change their law as they wish, it will be more difficult of them to attract investment," Bin Sulayem said after reporting full-year earnings. "The government is getting wrong advice," he said about the seizure of the port by Djibouti.
The African state had previously alleged DP World paid bribes when the concession was awarded in 2006, allegations denied by the company and rejected by the UK High Court in 2016. The six-year dispute threatens to sour relations and could damp investor appetite for Djibouti. On Somalia's parliament move to ban DP World from operating in the country, saying that a contract that the Dubai-based company signed in 2017 with the breakaway Somaliland region to develop an economic zone is null and void, Bin Sulayem said: "It doesn't concern us."
The ports operator said it remains committed to the port project in Somaliland despite Somalia's move to ban. It is unclear how Somalia's federal government could enforce the ban given Somaliland's semi-autonomous status.
The ban come after Dubai announced a tripartite agreement dividing the Berbera port between DP World (51 per cent), the Ethiopian government (19 per cent), and Somaliland (30 per cent).
- issacjohn@khaleejtimes.com
 

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