CTAA: Port of Melbourne hit by congestion following DP World IT issues
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Djibouti dissolves DP World’s concession
The Government of Djibouti has cancelled DP World’s operating concession for the Doraleh Container Terminal (DCT), the largest container-handling facility in the country.
The action follows what the authorities describe as “corruption in the concessionary process” and an agreement that “unfairly favoured” the terminal operator.
The Government is seeking financial damages from DP World, with the Office of the Inspector General seeking a resolution to the matter through the London Court of International Arbitration. It is unlikely that hearings will take place before 2015 and in order to mitigate disruption at the terminal and in the port of Djibouti, DP World will continue to operate the facility until the Court’s ruling.
“We will continue to manage DCT in accordance with the terms of our concession agreement”, declared a DP World statement. “We reject the allegations made and will vigorously defend our position during the arbitration procedure.”
It added: “We are disappointed that the Djiboutian Government has chosen to take this action after working so closely with us as partners over the past 14 years and we have invested significantly in Djibouti over those years and have been a major contributor to its economy and to its community.”
But there have been several disputes and issues between DP World and Port of Djibouti SA (PDSA) over this period. Initially, tensions arose over the plan for the DCT to be the exclusive provider of container-handling activity in the port as several ocean carriers did not want to transfer from the PDSA-run facility to DCT, principally it seems because of price.
The 30 year concession agreement for DCT commenced in 2006 and the terminal opened in 2009, when it handled all of Djibouti’s 519,000 TEU. Then in 2011, DP World’s contract to manage the whole port was terminated. The PDSA put the two quay cranes at its own terminal back into service and brought in reachstackers, the original 6 RTGs having been transferred to DCT.
In 2013 93.5% Djibouti’s total volume of 794,000 TEU was handled at DCT (743,793 TEU) with the remaining 50,938 TEU handled at the PDSA’s terminal.
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