Construction work has started on the development of the multi-purpose Berbera port in Somaliland, the self-declared republic which is internationally considered as an autonomous region of Somalia. The project which will see the port’s capacity increase to 450,000 twenty-foot equivalent units from the current 150,000 TEU, is being done in partnership with DP World, an Emirati maritime company.
The first phase, with investment of $101 million, will consist of building a 400-metre quay and 250,000 square metre yard extension as well as the development of a free zone to create a new regional trading hub. DP World Berbera, the joint venture company formed in view of the project, will also serve land locked countries in the Horn of Africa such as Ethiopia which has a 19 percent stake in the project. Total investment on the two phases of the project sill reach $442 million.
Following the emergence of Abiy Ahmed as Ethiopia’s Prime Minister earlier in the year, relative peace has returned to the Horn of Africa, with countries in the region settling their differences and charting a new course for common growth and economic development. This includes partnering on projects like the Berbera port expansion which will benefit Ethiopia, which though landlocked, now has access to ports in Eritrea and Djibouti. The country is also investing in four seaports with Somalia, as it also awaits the completion of the Berbera port in Somaliland.
“Connecting to landlocked countries such as Ethiopia and the rest of the region will reinforce the firm relationships that now exist and make Somaliland an important player in regional economic integration and growth,” President of Somaliland Muse Bihi Abdi, said at a groundbreaking ceremony on Wednesday.
“The importance of the Port of Berbera as a Red Sea gateway for the Middle East and Africa can now be realised, unlocking our potential as a trade hub and creating jobs across the country,” he added.
Somaliland hopes that the new project will boost its economy by attracting foreign investments and reducing unemployment.
Sultan Ahmed Bin Sulayem, Group Chairman and CEO, DP World, said over the next few years, “we will see a transformation in the capacity of this major infrastructure asset that will benefit people both here and across the Horn of Africa, providing an alternative gateway to international markets and providing jobs to the people of Somaliland”.
“This is all part of our vision to act as an enabler of trade and to encourage growth by helping African countries develop their economies with access to global markets. Investment in this natural deep-water port and free zone will act as a catalyst for the growth of the country and the region’s economy and create jobs at many levels,” Sulayem added.
According to him, DP World will also be investing in the development of the people who work at the port through training and skills development across the company’s network.
A similar partnership in Djibouti went south as the country nationalised its 76.5 percent stake in Doraleh Container Terminal (DCT) over a dispute with DP World which saw the country terminate its contract with the Dubai-based company. Despite a UK court ruling that Djibouti’s ports authority should not interfere with DCT’s management until the court resolves the dispute between the country and DP World, Djibouti went ahead with its action, saying that it was in the best interest of the country and its partners. Before the concession was terminated, DP World was controlling the terminal. This has not discouraged DP World from expanding its interest in the Horn of Africa, especially to areas that other investors might be wary of.
Somalia does not recognize Somaliland’s self-declared sovereignty and had in March declared its deal with DP World null and void, but President Abdi of Somaliland is unmoved, sending out a warning on Wednesday night that Somalia cannot interfere in Somaliland’s affairs.