Doraleh Container Terminal

The Doraleh Container Terminal (DCT) is a major port facility in the Port of Doraleh, Djibouti,[1] strategically located along the Red Sea and near the Gulf of Aden.[2] The DCT was built by the Dubai shipping company DP World in 2006 after securing a 30-year contract by the government of Djibouti, and opened in 2009.

The container terminal at the Port of Djibouti

In February 2018, following a dispute between the government of Djibouti and the Dubai-based shipping firm DP World, the government seized 33% of DP World stake and nationalized the terminal.[3] The move was ruled as illegal multiple times by the UK's high courts as it have breached the contact in 2006.[4] After seizing the port from DP World, Dijbouti government sold China Merchants Ports Holdings a quarter of the port's stake.[5]

Construction and capacity

The DCT was built in 2009 by the Dubai shipping company DP World after securing a 30-year contract by Djibouti in 2006.[1][6][7][8] The contract was one of a number of others won by DP World in the region, including one in Berbera, Somaliland.[7]

The DCT's quay is 1050 meters with 18 meters depth, and can hold 1.25 million TEU. The facility also operates eight Super-post-Panamax container cranes.[1] An ENOC petroeum terminal is located adjacent to the DCT.[8] The terminal is the largest employer in Djibouti and its largest source of revenue.[9]

As of 2015, the DCT was described as the most technologically advanced container terminal on the African continent.[10]

Shipping activity

The port is called by major shipping services in the region, including:[9]

  • OCEAN Alliance Red Sea Express 2
  • Maersk Line Horn of Africa
  • Maersk Line MECL
  • MSC Australia Express
  • CMA CGM and Hapag-Lloyd EPIC1/IPAK
  • CMA CGM Mona Express
  • CMA CGM and Emirates Swahili Express
  • CMA CGM and COSCO India Middle East Mediterranean Express
  • PIL Red Sea Gulf Service
  • COSCO and Yang Ming Red Sea Express

Djibouti-DP World conflict

In 2014 the Djibouti government accused DP World of bribing the port authority Abdourahman Boreh, and stated the operating contract was unfair.[6] A London commercial court cleared Boreh of misconduct in 2016.[6]

In November 2017, Djibouti passed legislation allowing it to renegotiate contracts related to strategic infrastructure.[7] In February 2018, on the order of president Ismaïl Omar Guelleh,[9] the Djibouti government seized the facility and placed it under the control of the government-owned Doraleh Container Terminal Management Company. The government stated that the DP World contract violated Djibouti's sovereignty.[2] In response, DP world began a new arbitration case in London against the termination of their 30 year contract to manage the port to secure "compensation for their breach or expropriation."[1] The Djibouti government stated it would engage in "normal compensation procedures" to pay for the nationalization.[11]

The nationalization has occurred as the United Arab Emirates has expanded its influence, included through military bases, around the Red Sea and East Africa.[6] At the intersection of the Red Sea and the Gulf of Aden, and located next to the Bab el-Mandeb strait, Djibouti occupies a strategic position, and hosts US, Chinese, French and Italian military bases.[9][6][7] Al-Jazeera has reported that according to its sources, relations between the UAE-based company and Djibouti were strained after Djibouti denied the UAE permission to build a military base on its territory.[2]

In 2017, a tribunal at the London Court of International Arbitration ruled against the Djibouti government claim that DP World's agreement was unfair, and ordered the government to pay DP World damages.[1] The London court was led by English jurists Lord Leonard Hoffman and Sir Richard Aikens.[12]

In 2018 the London High Court prohibited Djibouti government's port company from interfering with the management of DCT. As per the ruling, the Djibouti government "shall not act as if the joint venture agreement with DP World has been terminated".[13] As of January 2020, six legal rulings by London courts were won by DP World, with a ruling in January 2020 asking the Djbouti government to pay $533 million in compensation to DP World. An independent analysis has estimated DP World losses to be more than $1 billion. According to DP World, all rulings have been ignored by Djibouti despite the original contract for the concession was written and governed by English law.[4][14]

After seizing the port from DP World, Dijbouti government offered China Merchants Ports Holdings a quarter of the port's stake.[5] When the deal with DP world fell apart, DP World moved to invest in the port of Berbera, while Ethiopia, who depended on the Doraleh Container Terminal for 95% of its imports, acquired 19% stake in the port of Berbera.[15][16]

See also

References
  1. "DP WORLD ANGER AS DJIBOUTI SEIZES DORALEH TERMINAL". Port Strategy. 23 February 2018. Retrieved 24 February 2018.
  2. "Djibouti seizes control of Dubai-run Doraleh port". Al Jazeera. 23 February 2018. Retrieved 24 February 2018.
  3. "Djibouti seizes control of DP World's container terminal". Washington Post. Associated Press. 23 February 2018. Retrieved 24 February 2018.
  4. "DP World wins sixth ruling in $1bn Djibouti portdispute". Arabian Business. 14 January 2020.
  5. "Djibouti Rejects Court Ruling to Hand Back Container Terminal". Wall Street Journal. 17 January 2020.
  6. Gambrell, Jon (23 February 2018). "Djibouti seizes control of DP World's container terminal". ABC News. Associated Press. Retrieved 24 February 2018.
  7. "Dubai accuses Djibouti of illegally seizing key Africa port". Dhaka Tribune. Agence France-Presse. 24 February 2018. Retrieved 24 February 2018.
  8. Styan, David (2016). "Djibouti: small state strategy at a crossroads". Third World Thematics: A TWQ Journal. 1 (1): 79–91.
  9. Dupin, Chris (23 February 2018). "Djibouti government seizes container terminal". American Shipper. Retrieved 24 February 2018.
  10. Ismael, Hawa; Vandyck, George (2015). "Forecasting Container Throughput at the Doraleh Port in Djibouti through Time Series Analysis". Applied Mechanics, Mechatronics And Intelligent Systems-Proceedings Of The 2015 International Conference. World Scientific: 341.
  11. Kerr, Simeon; Aglionby, John (23 February 2018). "DP World accuses Djibouti of illegally seizing container terminal". Financial Times. Retrieved 24 February 2018.
  12. "Government of Djibouti illegally seizes control of Doraleh port from Dubai Ports World". Gulf Digital News. 24 February 2018. Retrieved 24 February 2018.
  13. "English High Court continues restraint against Djibouti Port Company over shares in Joint Venture".
  14. "Djibouti Ordered To Pay $533M In Compensation In Container Terminal Dispute With Dubai". Forbes. 14 January 2020.
  15. "DP World wins ruling against Djibouti over seized port". AP News. 14 January 2020.
  16. "For Somaliland and Djibouti, Will New Friends Bring Benefits?". Foreign Policy. 19 March 2019.

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