UAE breaches port contract signed with Somaliland
The UAE international ports operator, DP World, which signed a 30-year contract with Republic of Somaliland to manage its largest port has recently been found violating the contract which was approved by the parliament in February.
According to the report gathered by our correspondent in Hargeisa, the DP World’s $442 million investment deal, which is meant to allow the company to have 65% of Joint Venture share with Somaliland Government, is attached with a condition that the controversial company will take the responsibility of renovating and standardizing the port. But unfortunate this company has so far defaulted.
It was a serious blow to Somaliland government to realize that DP World has only opted to maintain the company’s original and obsolete structure, despite producing over $10 million in revenue from the port per month.
Under the deal, the firm was also supposed to equip Barbara port with modern seaport and airport operational tools and further expand the port with the construction of a 400 meter square area. This again has not been fulfilled by DW World.
The breach in the port’s contract by this Emirati international port operator has given the opposition party members in the country affirmation of the signed agreement as a very bad and unprogressive deal with Somaliland.
Speaking on the port deal, President Ahmed Mohammed Mahmoud Silanyo pointed out that the base would help create jobs opportunities for thousands of Somali residents.
However, things have not turned in favor of the president as DP World sacked more than 250 out of its 950 port local port workforce in February 2017.
President Silanyo added that the military base deal would also help protect the 850 kilometer coast line which has been prone to over exploitation.
Reliable source also disclosed that the dissident Djiboutian business tycoon Abdourahman Boreh who previously persuaded Dubai to invest in Djibouti is believed to be behind a deal which allowed the UAE to lease Berbera port with the help of Bashe Awil, Somaliland ambassador to UAE as well as the son-in-law of Somaliland’s president.
Amid pressure and deepening opposition by neighboring countries including Djibouti and Ethiopia, the UAE government has offered concessions in a bid to the tension, giving 19 percent shares to Ethiopia, leaving out Djibouti which earlier warned Somaliland over the port deal.
Somaliland Presidential Spokesperson Hussein Ige said that the enclave would play the administration role as a supervisory and manager of the port while Ethiopia will be the main consumer of the port services.
According to economic analysts, Berbera’s management by UAE is parts of retaliatory measures against Djibouti which annulled the Dubai-based ports operator DP World’s terminal contract followed by arbitration proceedings by the Djiboutian government over alleged corruption by the company.
The United Arab Emirates has since cut diplomatic relations with Djibouti and picked Somaliland as its alternative base other than Somalia which signed multiple agreements with Turkey, a long time strategic rival of UAE to run its key economic hubs including Mogadishu port and the International airport.
Somaliland has also approved a UAE proposal to set up a military base in the region from where the Arab coalition forces would launch attacks against the Shiite Houthi fighters fighting the Yemeni government.