DP World to finalize feasibility studies on regional logistic hub

By Birhanu Fikade
Saturday April 20, 2019

The United Arab Emirate (UAE) based multinational port and terminal operator, DP World, said that it has been closely following the privatization moves the Government of Ethiopia is considering; and currently, the state-owned operator is finalizing a feasibility studies to launch a logistical operations across East Africa where Ethiopia is one of the targeted countries.

Suhail Al Banna, CEO and Managing Director of DP World for Middle East and Africa, said that the feasibility study to establish a regional logistics hub, centered on the Port of Berbera, will be finalized in the coming three months.

It is to be recalled that back in October, while launching the initial port expansion project and signing the construction contract agreement worth USD 101 million in Hargeisa; Sultan Ahmed bin Sulayem, Chairman and CEO of DP World, told reporters that DP World is looking at its options to develop a logistic facility in Ethiopia especially pursuant to the recent decision taken by Ethiopia to privatize its assets in the logistics sector.

The Emiratis, nonetheless, want to study the potentials of Dire Dawa and the surrounding areas for a trade logistic infrastructure development. The ongoing feasibility study across the Berbera corridor, which is deemed to become a regional hub in the Horn of Africa, could link the Red Sea to Europe and the Far-East. Suhail Al Banna said that the study will also look at the potentials of the likes of Jigjiga city in Somali Regional State of Ethiopia.

Earlier this week, during an inaugural ceremony held at the Port of Berbera, DP World has commissioned three Mobile Harbor Cranes (MHC) costing USD 12 million. President Musse Bihi Abdi and senior government officials of Somaliland including Said Hassan Abdullahi, general manager of the Berbera Port Authority, attended the commissioning at the port. Hassan Abdullahi told Ethiopian media outlets on the occasion that previously, depending on the wind, vessels were forced to spend three to four hours of turnaround time before they could unload shipments and discharged from the port. According to the general manager, due to the delay, the Berbera port was able to handle 14,000 (twenty feet equivalent units-TEU) containers a month. However, after the deployment of the MHCs, it will reach to a point where it can handle more than 28,000 TEUs per month.

Suhail Al Banna also said that the port operations is further expected to boost cargo handling in a much efficient manner where the multipurpose facility could handle more roll on–roll off (ro-ro), general cargo and liquid cargo, depending on the needs and orders of customers. So far, including MHCs, two reach stackers, 10 internal transfer vehicles (ITVs) and five forklifts have also been installed since the official hander-over of the management and port operations to DP World was effective starting from 2017.  In addition, DP World has provided trainings for 2,700 Somaliland and other employees working at the Berbera Port.

Back in 2016, DP Word acquired a 30-year concession with a 10-year automatic extension of managerial and port operations contract in Berbera. DP World has set up a joint venture agreement with Governments of Somaliland and Ethiopia, where a 51, 30 and 19 percent shares are controlled by each side, respectively.

The three sides have agreed that a total of USD 442 million will be invested including the first phase project which has launched a 400 meter quay or berth and 250,000 square meter yard expansion. In addition to that, DP World will also develop a free zone in an effort to create a regional trading hub along with the free zone.

The government of Somaliland has started the construction of a road project linking Brebera to Togochale, a border town that connects Somaliland with the eastern part of Ethiopia. The linking road which will require close to USD 90 million is expected to be partly financed by the UAE. The Minister further stated that when further need is required, Ethiopia will also be requested to help.

 The major target of the Berbera Port development, according to Saad Ali Shire, is the Eastern part of Ethiopia which includes a vast swath of land extending from Somali Region to Dire Dawa.