Business | General

DP World plays down talk of Aden contract cancellation

Ports operator refuses to confirm termination of agreement to manage Aden port

  • By Zaher Bitar Senior Reporter
  • Published: 18:58 August 26, 2012
  • Gulf News

  • Image Credit: REUTERS
  • Cargo ships at the Port of Aden in southern Yemen. According to Reuters, the board of Gulf of Aden Ports Corporation decided to cancel the agreement with DP World, citing a breach of contractual obligations.

Dubai: Senior DP World officials have refused to comment on news that its contract to manage Aden Port has been cancelled. They termed the news part of a smear campaign.

Mohammad Sharaf, DP World CEO, said: “The tree bearing fruit gets stoned. We are not obliged to comment on this.”

According to Reuters, the board of Gulf of Aden Ports Corporation decided to cancel the agreement with DP World citing a breach of contractual obligations.

Sharaf said DP World has not received any official request related to the cancellation.“I have not heard such news. I can’t comment or even respond to a statement that has no credibility,” he said.

Sultan Bin Sulayem, Chairman of DP World, also refused to comment, terming the news “media speculation”.

On the other hand, Aden Ports Corporation also said they have not received official confirmation from the minister of transportation about any cancellation.

Reuters said that the port authority in the Yemeni city of Aden has begun talks with DP World on cancelling a contract to manage the Aden port.

“The board of Aden Ports Corp decided to cancel the agreement with DP World. There is contact with DP World to complete the process of cancellation amicably,” a Yemeni ministry official, who declined to be named under briefing rules, said.

He added that the decision had been taken on Saturday and the two parties would use international arbitration if they cannot reach an agreement.

In June, Yemen’s anti-corruption body said it would ask parliament to cancel the deal with the world’s third largest port operator, claiming DP World had failed to carry out investment projects.

DP World had termed the allegations “misleading and unfounded”.

Yemen signed a contract with DP World in 2008 to develop and run the port, whose strategic location at the mouth of the Red Sea once made it a vital stop for ships bound for the Suez Canal.

Dubai & Aden Port Development Company

Dubai & Aden Port Development Company (DAPDC) is a joint venture company between DP World Yemen and Yemen Gulf of Aden Ports corporation. It currently operates Aden Container Terminal and Al Ma’alla Container Terminal. The agreement includes the lease of both Aden Container Terminal and of nearby Ma’alla Container terminal, to develop the ports including building a new 400 metre berth extension to Aden Container Terminal within five years from handover. The joint venture plans to further expand capacity as dictated by market. Work on the infrastructure development of Aden Container Terminal has started and the operating company has commissioned state-of-the-arts equipment for the terminal in oreder to increase the terminal’s capacity and efficiency.

The agreement stipulates $220 million (Dh808.1m) of investment over five years.of investment to develop the port.

DP World owns a 33.4 per cent stake in Dubai & Aden Port Development, according to regulatory filings.

The contract aim to develop, finance and operate Aden Container Terminal and Al Ma’alla Container Terminal in Aden Port. To develop the port through obtaining, installing and operating the equipment of necessity for facilitating the container handling process and operating the equipment of necessity for facilitating the container handling process and operating all the quays.

Construction of the 400 meter long and 17 meter deep quay is in course of planning .

Early this year, Yemeni transport Minister, Waed Abdullah Bathib told Reuters the company had missed a target of raising container capacity to 900,000 20-foot equivalent container units by the end of 2011, and had failed to build and provide infrastructure as specified in the 2008 agreement.

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