Djibouti Moves to Control Port, Intensifies Clash with Dubai’s DP World


(STN-MUQDISHO):_ The Republic of Djibouti has nationalized a company that owns a majority stake in a port in the East African country, intensifying its dispute with DP World, one of the largest port operators in the world.

On Monday, the Djibouti government announced it had taken control of all shares of Port de Djibouti SA, an entity that owns a two-thirds stake in the company that operated the Doraleh Container Terminal. The other third of the company that ran the port is owned by DP World, which is majority owned by the Dubai government.

The fight over the Doraleh terminal highlights the growing strategic importance of Djibouti, which is close to some of the world’s busiest maritime shipping lanes in the Red Sea and Gulf of Aden.

In February, the Djibouti government seized the facility, stating that it had terminated a 2006 concession that allowed DP World control of the Doraleh terminal. This July, Port de Djibouti SA terminated its shareholder agreement with DP World, according to the government.

The Doraleh terminal is now being run by a public company that is solely owned by the Republic of Djibouti, the government said.

Port de Djibouti SA had been owned by the Djibouti government and Hong Kong-based China Merchants Port Holdings Co mpany Ltd., which said in its 2017 annual report it has a 23.5% stake in the asset. China Merchants didn’t immediately respond to a request for comment.

DP World has sought to remained involved in the Dorelah terminal. On Sept. 5, the company said it had obtained an injunction from the High Court of England and Wales that prevented the Djibouti government from pushing it out of the port, removing directors at Port de Djibouti SA directors or interfering with that entity’s management.

Representatives for DP World didn’t immediately respond to a request for comment Monday.

“DP World’s ‘strategy,’ which consists in trying to oppose the will of a sovereign state, is both unrealistic and destined to fail,” the government of Djibouti said in its statement.

The government said it had not been warned that DP World had initiated the legal proceeding and described the injunction as “merely a provisional measure.” It added that “a fair compensation outcome is the only possible option for DP World, in line with the principles of international law.”



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