By T. Roble
Ethiopia has acquired a 19% stake in Berbera Port following a new deal inked between Somaliland and the Emirati based ports operator DP World Thursday concluding months of negotiations.
DP World said Thursday in a statement the three parties signed the shareholding agreement in Dubai that will see DP World cede almost 15% of its initial share to control 51% while Somaliland will remain with 30% based on earlier agreements.
“DP World will hold a 51% stake in the project, Somaliland 30% and Ethiopia the remaining 19%,” the statement read in part. “Ethiopia will also invest in infrastructure to develop the Berbera Corridor as a trade gateway for the inland country, which is one of the fastest growing countries in the world.”
Somaliland parliament approved a $442 million concession for DP World September 2016 that would grant the operator control of the facility for 30 years. The ports operator also signed a $339 million 30 year concession through its subsidiary P&O Ports with Puntland last year to operate Bosaso port.
Earlier agreements September 2016 indicated Ethiopia state owned Ethiopian Shipping and Logistics Services Enterprise (ESL) had acquired 10% shareholding but Ethiopia pushed for a greater share of the cake as it aimed to secure more stake to avoid overdependence on Djibouti ports since it’s a land locked country.
AGREED IN PRINCIPLE
Somaliland Foreign Minister Saad Ali Shire told Bloomberg mid last year Somaliland had agreed “in principle” to give Ethiopia a 19 percent share in the venture administering Berbera port.
“After a year of negotiations, Ethiopia has concluded an agreement with the Somaliland Ports Authority and DP World that will give the Government of Ethiopia 19% stake in the joint venture developing the Port of Berbera,” Ethiopian Trade Minister Ahmed Shide said Wednesday.
Shide added the pact would give his country an additional logistical gateway ‘for its ever increasing participation in the development of the port of Berbera and the Berbera Corridor will help bring increased economic development and opportunity to the people of Somaliland’.
The development of the Berbera Corridor includes the construction of a 250 kilometre road linking Berbera Port and the border town of Wajale straddling the boundary between Somaliland and Ethiopia. Somaliland and UAE signed the agreement last July to actualize the development of the corridor which also includes the construction of a civilian airport in Berbera in line with the naval base deal agreed to by the two parties early 2017.
The development comes barely a week after Djibouti terminated management of Doraleh Container Terminal contract by DP World noting said it took the decision to protect its “national sovereignty and economic independence.”
The port operator said it would seek legal redress at the London Court of International Arbitration which cleared it of all charges of misconduct over a concession to operate the Doraleh terminal last February.
Somaliland Minister Saad Ali Shire said during the signing of today’s agreement the deal was instrumental since the ‘economies of the region are growing at a pace that necessitates the development of multiple ports and outlets’.