Djibouti’s Doraleh Container Terminal Management Company has signed a contract with Singapore-based shipping company Pacific International Lines (PIL), which is set to bolster cargo volume at the terminal by 33 pct, the Djibouti Ports and Free Zones Authority (DPFZA) said.
Namely, the port deal is expected to bring an additional 300,000 TEU containers to the terminal per annum.
“This agreement is a first important step towards Doraleh Container Terminal (DCT) fulfilling its capacity potential,” the ports authority is cited by Reuters as saying.
The contract comes on the heels of Djibouti’ termination of the concession contract with Dubai-based port and terminal operator DP World for the operation of DCT.
The decision has prompted DP World to launch new arbitration proceedings in London against the Government of Djibouti.
DP World dubbed the move “illegal seizure of control” and a culmination of the government’s campaign “to force the company” to renegotiate the terms of the concession.
The Government of Djibouti, on the other hand, attributed the decision to the poor performance of the container terminal.
According to a statement from Djibouti Ports and Free Zones Authority, since 2008, DCT has achieved only 57 pct of its total volume, despite operating in a favorable import/export environment.
“In the meantime, DP World developed other ports in the countries close to Djibouti and used aggressive tactics such as the deliberate slowing of the development of DCT in favor of their main asset at Jebel Ali,” DPFZA said.
Djibouti has since assumed management of DCT, which has been placed under the authority of the Doraleh Container Terminal Management Company. The terminal has a capacity of 1.6 million TEUs per year.