Puntland parliament shoots down motion to end P&O Ports deal

A motion seeking to terminate a ports upgrade contract awarded to UAE’s ports operator P&O Ports at the cost of $336 million collapsed Monday after majority of legislators in Puntland parliament shot it down.

The motion backed by 20 legislators tabled today at the state assembly was voted down through acclamation. The proponents of the motion sought the state parliament’s approval to terminate the contract signed by state president Abdiweli Gaas last April over claims the contract had not been actualized.

The lawmakers said Global Services Port supposedly subcontracted by P&O Ports had not started any construction works in Bosaso port close to two years since the contract was signed.

According to the contract whose details remain scanty, P&O Ports a subsidiary of the state owned Ports, Customs and Free Zone Corporation (PCFC) which also owns DP World was supposed to build 450m quay and a 5 hectare back up area, dredging to a depth of 12m with reclamation work using dredge spoil.

The deal which is set to be executed in two phases also involves major investment in an IT and Terminal Operating System (TOS), mobile harbour cranes and container handling equipment.

The first phase is billed at $136 million while the second phase will cost $200 million.

But in today’s session attended by 40 out of 66 MPs saw lawmakers question the pace at which the contract was being executed. The ports expansion and equipping was to be completed in two years, the lawmakers said, but “No work has taken place yet.”

P&O Ports won the 30 year concession last year shortly after DP World secured a similar deal in Somaliland’s Berbera Port at a cost of $442 million. The Berbera Port deal later became a subject of serious diplomatic fall-out between Somalia and the United Arab Emirates with the Federal Government accusing the Gulf nation of breaching its sovereignty.

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