Djibouti signs port deal with PIL

The Doraleh Container Terminal Management Company (DCTMC), which was formed recently to manage the container terminal in Djibouti, has signed an agreement with one of the biggest container movers in the world, Pacific International Lines (PIL). This will increase DCT’s activity by one third.
DCTMC was created by the government of Djibouti the day they severed ties with DP World, a UAE based port operator, who also owned one third of the share at Doraleh. Now they have come to terms with PIL, a Singapore based shipping company, to increase handling by 300,000 TEU containers per annum.
In its announcement early this week Djibouti Ports and Free Zones Authority (DPFZA), which oversees the country’s port operations, said this would boost their cargo volume at the terminal by 33 percent.
“The port deal is expected to bring an additional 300,000 TEU containers to the terminal per annum,” it added.
The terminal has a capacity of 1.6 million TEUs per year, while its actual performance is 900,000 TEUs.
The authority said that the agreement is the initial move towards the Doraleh Container Terminal (DCT) achieving its potential.
DCT began operating in December 2008 under the management of DP World and two thirds ownership of the government of Djibouti. The authority recently claimed that DCT achieved only 57 percent of its capacity under DP World.
In his interview with Capital, Mohammed Idriss Farah, Ambassador of Djibouti to Ethiopia, said that his country saw through DP world’s strategy, after some thought, and realised that taking shares in Djibouti’s ports enabled them to stifle Djibouti to the benefit of Jebel Ali’s port.
“This port has 1.6 million TEU capacity even though we never went above 900,000 TEU and they were telling partners like PIL that it was impossible to unload in Djibouti as the port was saturated, and that they should go to Jebel Ali,” he said.
“We want to develop our port, we want to go from 3 to 10 million containers and be the main port of Africa, this is Djibouti’s objective, and this is something they do not want,” he claimed.
The ambassador said that in terms of capacity of service with the capability to double in this first phase with the Singapore company PIL, that already signed up for 300,000 containers per year to transit there, DCT will go up to 1.2 million containers and others are also willing to work with the port management.
PIL is considered as the 11th biggest company in container operation is expected reach 9th place in the coming year. In 2016 the company agreed with China Merchant Group to work together for the realization of the Belt and Road Initiative that the Chinese government has launched.
Recently the port management that was responsible for ports in Djibouti except for DCT announced that it reduced port operation tariffs. However, the tariff was not adjusted for DCT.
The Djibouti Ambassador said that since the authority is now directly managing the DCT it would include the tariff adjustment like it did for other ports.
“Of course, because the decision of 50% decrease was not made by DP World but by the Djiboutian government, now a Djiboutian state owned company has taken over there is nothing to worry about on that matter as it is a sovereign decision that will be enforced for all users and clients of the port,” he said.