In brief
- On Aug. 9, 2016, Goobjoog News reported that Somaliland's parliament had unanimously endorsed a 30-year concession for DP World to manage the Port of Berbera.
- The report details investment terms, shareholding structure, tax holidays, and staff absorption, but does not establish any implementation progress since the vote.
- DP World said the $442 million project would be phased over time and is dependent on port volumes.
On August 9, 2016, Goobjoog News reported that Somaliland's parliament had unanimously endorsed a port management agreement granting Dubai-based DP World rights to run the Port of Berbera for the next 30 years.
The article, published the same day, described a three-day debate followed by a vote in which 69 of 74 lawmakers supported the concession and four rejected it, according to Goobjoog News.
The report said DP World would inject an initial $10 million in equipment to support the Berbera Port Authority (BPA) and a further $5 million in cash. It also stated that DP World would control a 65% stake in the new company while the BPA, as grantor, would take the remaining 35%.
Goobjoog News further reported that BPA would receive a direct 25% shareholding in consideration for awarding the concession and transferring existing assets and water fronts, contributed in kind. The remaining 10% of shares would be awarded to BPA in exchange for a cash contribution, with DP World retaining 50% of dividends from that BPA shareholding until the cash contribution is fully paid.
DP World said in a statement in May of that year, as reported by Goobjoog News, that the $442 million project would be phased over time and is dependent on the volumes generated at the port. The article did not specify the currency of the $442 million figure.
The project will also involve setting up a free zone to help support the development of Berbera's trade corridors, DP World noted, according to the report. The company said the investment would attract more shipping lines to East Africa and catalyse economic growth in the region.
Under the agreement, the new company would absorb current port employees based on a needs assessment after handover, with the rest remaining with the Berbera Ports Authority, Goobjoog News stated. The new company would enjoy a 100% corporate tax holiday for the first ten years of the term and 50% for the next five years.
The report did not establish what has happened since the August 2016 approval. It contained no information on commencement of works, implementation milestones, or subsequent agreements.
DP World's website states that it has a portfolio of 77 terminals in 40 countries across six continents, according to the article.
Frequently asked questions
What are the key terms of the 30-year Berbera Port concession?
According to Goobjoog News, DP World gets a 65% stake, BPA 35% (including direct 25% plus 10% for cash), an initial $10 million in equipment and $5 million cash, a 100% corporate tax holiday for 10 years and 50% for the next five, and absorption of port employees on a needs basis.
What is the timeline for implementation?
The Goobjoog News report did not give a specific timeline for implementation. DP World said the $442 million project would be phased over time and dependent on port volumes, but no subsequent progress was reported.
What are the expected investments and capacity expansions?
The report included DP World's statements about a $442 million phased project and establishing a free zone, but did not provide details on capacity expansion or timelines. The figure was not explicitly confirmed as US dollars.