Djibouti seeks to rescind DP World's port concession

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Djibouti seeks to rescind DP World's port concession

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The government of Djibouti plans to rescind the concession awarded to DP World for the operation of the Doraleh Container Terminal (DCT).

Djibouti government alleges that it has found apparent evidence of corruption. DP World received a notice of the Inspector General of the Republic of Djibouti explaining that it is investigating the awarding of the DCT concession and that it has filed for arbitration before the London Court of International Arbitration.

The firm stated in a press release:

We reject the allegations made. We are disappointed that the Djiboutian government has chosen to take this action after working so closely with us as partners over the past 14 years. We have invested significantly in Djibouti over those years and have been a major contributor to its economy and to its community.

DP World, which has a portfolio of about 65 terminals around the world, said that it will continue to manage DCT in accordance with the terms of its concession agreement pending the determination of the arbitral tribunal. 

In 2006 DP World signed a 30-year concession contract to operate the Doraleh Container Terminal. The facility was inaugurated on 15 December 2008.

Standard Chartered Bank (SCB), Dubai Islamic Bank PJSC (DIB), WestLB AG and other participating banks financed US$422 for the project under an Islamic project finance facility. The Multilateral Investment Guarantee Agency (MIGA) issued guarantees for their investments.

The terminal has an annual handling capacity of 1.2 million TEU, the largest in East Africa, with almost 50% of containers handled destined for Ethiopia. Its 18 metre draft and 1050 metre quay accommodate the largest ships with six super post-panamax STS cranes and sixteen RTG cranes handling container traffic.

If DP World loses the concession, it would be the second exit from the Horn of Africa region for the firm. In September 2012, the firm announced it had sold its 50% stake in the company managing the container terminal of the port of Aden in Yemen.

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