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Djibouti plans new container terminal to bolster transport hub aspirations

28 March 2018 Comments (0) Actualites, Africa, Business, Economy, Infrastructure

ABIDJAN (Reuters) – Djibouti is in talks with French shipping company CMA CGM to develop a new container terminal at an initial cost of $660 million as part of the tiny African country’s bid to expand into a sea and air transport hub for the continent.

Aboubakar Omar Hadi, chairman of the Djibouti Ports and Free Zone Authority (DPFZA), told Reuters on Tuesday that the authority hopes to award the concession in July. It was also prepared to buy out DP World’s stake in an existing container terminal to end a row with the Dubai port operator and avoid arbitration, he said.

Djibouti’s strategic location has led the United States, China, Japan and former colonial power France to build military bases there.

Its ports already serve as an entry point for cargo which is then sent by smaller vessels to ports along Africa’s eastern coast, but it is now seeking to become a sea-air transshipment hub for the entire continent.

To do this, Hadi said DPFZA was also planning to construct a $350 million airport and expand Air Djibouti’s fleet of cargo aircraft.

The new container terminal project could break ground as early as September with construction expected to take 24 months, Hadi said, speaking on the sidelines of the Africa CEO Forum in Abidjan, Ivory Coast.

“We are going to build DICT, Doraleh International Container Terminal. This is a new plan,” he said. “We are in discussions with CMA CGM.”

The port authority was not in talks with any other potential partners, he said. CMA CGM did not immediately respond to a request for comment.

Once operational, Hadi said the port terminal would boast an annual capacity of 2.4 million twenty-foot equivalent units (TEU), but subsequent expansion phases would bring that up to 4 million TEUs.

Fifteen percent of the project’s cost will be financed through equity. Of that, the DPFZA will contribute 85 percent, with its concession partner providing 15 percent. The rest will be raised via international institutions and banks.

“We are targeting trans-shipment,” Hadi said.

 

DP WORLD DISPUTE

Meanwhile, Hadi said the port authority was ready to end a dispute with DP World over its cancellation of a concession contract for another facility, the Doraleh Container Terminal, by buying out DP World’s 33 percent stake.

Djibouti ended the contract with the Dubai state-owned port operator last month, citing a failure to resolve a dispute that began in 2012.

DP World has called the move illegal and said it had begun proceedings before the London Court of International Arbitration, which last year cleared the company of all charges of misconduct over the concession.

“We are prepared to pay them their 33 percent of shares,” Hadi said. “There is no need for arbitration. We are going to buy their shares.”

 

(Reporting by Joe Bavier; Additional reporting by Gus Trompiz in Paris; Editing by Aaron Ross and Susan Fenton)

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Djibouti accuses Eritrea of occupying disputed territory after Qatar withdrew peacekeepers

16 June 2017 Comments (0) Latest Updates from Reuters

By Aaron Maasho

ADDIS ABABA (Reuters) – Djibouti accused neighbouring Eritrea on Friday of occupying disputed territory along their border after Qatar withdrew its peacekeepers.

Foreign Minister Mahamoud Ali Youssouf said Djibouti’s military were “on alert” and that it has lodged complaints to the U.N. and the African Union.

Qatar announced that it was pulling its contingent out on June 14, days after the two East African countries sided with Saudi Arabia and its allies in their standoff with Qatar.

Doha’s foreign ministry did not give a reason for the move but it comes as Doha faces a diplomatic crisis with some of its Arab neighbours. They cut ties a week ago, accusing Qatar of backing Islamist militants and Iran, something Doha strongly denies.

“Qatari peacekeepers withdrew on June 12 and 13. On the same day, there were Eritrean military movements on the mountain,” Ali Youssouf told Reuters.

“They are now in full control of Dumeira Mountain and Dumeira Island. This is in breach of the UN Security Council resolution,” he added, referring to areas that the neighbours dispute.

Authorities in Asmara were not immediately available for comment.

Djibouti, a close Western ally, hosts French and U.S. military bases and is the main route to the sea for Eritrea’s arch foe and Washington’s top regional ally, Ethiopia.

Eritrea has fractious ties with the West, which had previously accused it of backing Somali and other regional insurgents. Asmara denies the charges.

Clashes broke out between the Horn of Africa countries in June, 2008, after Djibouti accused Asmara of moving troops across the border, raising fears the spat could engulf the entire region.

The dispute triggered several days of fighting that killed a dozen Djiboutian troops and wounded dozens. Eritrea had initially denied making any incursions, accusing Djibouti of launching unprovoked attacks.

The U.N. Security Council then requested both sides withdraw from the area, before the neighbours accepted a Qatari request to mediate and deploy peacekeepers.

 

 

 

 

(Writing by Aaron Maasho; Editing by)

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Will Djibouti become the Singapore of Africa?

22 February 2016 Comments (0) Africa, Business, Featured

Ismail Omar Guelleh

The tiny country on the Horn of Africa hopes to use its strategic location to boost trade and diversify its economy.

The tiny nation of Djibouti has set its sights on becoming the Singapore of Africa, a trade hub that takes advantage of its location on one of the world’s busiest shipping routes.

China’s recently announced plans to build a naval base in the Horn of Africa country gave a boost to Djibouti’s ambitions. Other plans, with a price tag of $12.4 billion, include expansion of port facilities, two new airports, as well as a $4 billion rail link with Ethiopia, Djibouti’s land-locked neighbor.

“We want to follow the path of Singapore,” Dijbouti president Ismail Omar Guelleh said.

China provides significant assistance

China is playing a significant role in Djibouti’s development as the Asian nation seeks to expand its influence in the region and secure trade routes with its “One Belt, One Road” initiative. Chian is financing most of the $12.4 billion in improvements as well as the $4 billion rail link with Ethiopia.

Work is expected to start soon on the Chinese naval base, which will be located at the new multi-purpose port of Doraleh.

The two countries have agreed to a 10-year lease for the base with China paying rent of $100 million per year. The base will house about 10,000 Chinese troops and is expected to boost local employment and businesses.

The United States and France already maintain naval bases in Djibouti.

Djibouti’s plans call for development of a second port, also at Doraleh, designed to handle container shipments.

Two new airports will be built

China is also providing support for two new airports Djibouti is building at a cost of nearly $600 million. With these projects, Djibouti hopes to increase both cargo shipping and tourism, which makes up a small part of its economy.

One airport at Ali-Sabieh, south of the capital will be capable of serving 1.5 million passengers and moving 100,000 tons of air cargo annually. It is expected to begin operating in 2018.

A second, smaller airport will be built in northern Djibouti. Designed to handle more than 750,000 passengers a year, it is expecting to start operating in 2016.

Rail line to link Djibouti, Ethiopia

China also is building a $4 billion railway line that will link Djibouti with Ethiopia, one of the fastest growing economies globally, which gets about 90 percent of its imports through Djibouti. The rail line will give land-locked Ethiopia a link to the sea while Djibouti will gain access to a market of 95 million people.

Djibouti, one of the poorest countries on the continent, envisions becoming a middle-class country in two decades in its “Djibouti Vision 2035” blueprint drafted with the help of the World Bank.

Ports and trade are already at the center of Djibouti’s economy but the nation hopes to diversify.

More than two thirds of Djibouti’s gross domestic product comes from the services, primarily port and trade-related operations. The remainder is from manufacturing and agriculture. Poverty is prevalent and unemployment is 60 percent in urban areas. The literacy rate is 70 percent.

Seeking economic diversification

Djibouti seeks to further diversify its economy by becoming a regional financial hub for foreign investment, including Islamic banks. China and Djibouti also signed deals for banking and free trade zones.

“Nowadays we are shifting to a much more integrated development plan. We’re trying to diversify our economy,” Djibouti finance minister Ilyas Dawaleh said.

Dawaleh noted that his country has enjoyed strong economic growth in recent years – 6.5 percent of gross domestic product in 2015 and 5.7 percent in 2014.

He predicted Djibouti will achieve double-digit annual growth in the next three years. “This is our target with our diversification strategy we are undertaking now,” he said.

Dijbouti is one of four countries that make up the Horn of Africa and the only one that has been largely peaceful for the past two decades while its neighbors across the Gulf of Aden – Somalia, Eritrea, and Yemen, have endured conflicts. This has enabled Djibouti to emerge as the main military and maritime hub in the troubled region even though the country is largely undeveloped.

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