Addis Fortune (Addis Ababa)
Tamrat G. Giorgis
6 July 2009
Disagreement is brewing between officials in the marine sector in Ethiopia and Djibouti over the use of the Port of Djibouti, and whether or not Ethiopia's flagship carrier should continue to pay security fees, reliable sources disclosed to Fortune.
The management of the Port of Djibouti, DP World, has rejected a request made three months ago by the Ethiopian Shipping Lines (ESL) to be granted a dedicated access to two of the 15 berths at the Port. The two berths ESL showed strong interest in are berths number one and two, which were handling containers, fitted with two gantry cranes.
Signed by Jerome M. Oliveira, chief executive officer (CEO) of the Port of Djibouti, the letter DP World wrote on June 21, 2009, says it "would not be possible for Djibouti Port to honour" ESL's request.
Ambachew Abraha, managing director of the ESL, first made his request when he met Aden Ahmed Douale, chairman of the Djibouti Ports and Free Zones Authority, in March 2009; he had expressed his company's desire to lease the container terminal at the Port of Djibouti, these sources disclosed. He subsequently wrote a letter to Douale three days after their meeting in Djibouti, including a request to be waived from security fees ESL pays per container, which is close to six dollars, according to these sources.
ESL request is followed the completion of a brand new port at Doraleh, which incorporates both oil and container terminals. Consuming a total investment of 400 million dollars, the investment raised from the Dubai based DP World, Doraleh is built 13Km east of the Port of Djibouti to earn a reputation as the largest in East Africa; it can handle 1.2 million containers (20ft) annually.
DP World Djibouti has made a decision to move all operations related to container handling to the terminal at Doraleh, leaving the old port to the operations of general cargoes. Nevertheless, ESL managers argue that their vessels are multipurpose in character, including Ro/Ro (carrying vehicles), general as well as bulk cargoes. They claim that going back and forth between the new and old port facilities would subject them to additional costs.
Of Ethiopia's 4.8 million tonnes import and exports of goods in 2008, up from 3.9 million tonnes in 2006, ESL brings an average of 20,000 containers.
"Ethiopian Shipping Lines container handling activities will be done in Doraleh Container Terminal (DCT) as from July 1, 2009," says the letter. "The General Cargo/Roro will be discharged and loaded in Djibouti Port without prejudice of shifting cost when ESL's containers will be discharged previously at DCT."
The management of DP World says allowing ESL to have berths dedicated to its container operations would deny Djibouti Port the "flexibility" for further development and investments; and the contract signed between the management firm, lenders and the government of Djibouti, requires all "container activities must be transferred" to the new container terminal at Doraleh.
Although inaugurated in February 2009, it was at the beginning of this month vessel operators were told to discharge all their containers at Doraleh. One of the largest ship operators, Messina Liner, was told to use the new container terminal as of July 1, 2009. This notice has not been made to ESL yet, sources disclosed. Nor have any of the nine vessels owned by ESL arrived at the Port; there was only Shebelle, with 5,000tns of cement bought from Pakistan, that has called Djibouti last week.
"But the bulk cargo it carries couldn't tell us whether the new notice applies on us," said a senior manager at the ESL.
Oliveir has also informed ESL in his letter that the Port Authority of Djibouti will continue to check incoming containers for security purposes. ESL had argued that since all the containers are certified for having gone through security checks upon departure, subjecting containers it brings to searches incurs it to double charges.
But ESL managers are infuriated more with the form of the exchange of letters than the substance, reliable sources disclosed. Although their letter was addressed to officials of the Djibouti government, the response came from the CEO installed by DP World, a foreign firm awarded a management concessions.
"This makes us question who responsible in Djibouti is to discuss with Ethiopia," said one senior manager.
Managers of DP World Djibouti have not responded to questions emailed from Fortune.
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I am glad that DP world has taken over the management of Djibouti Port. Had it been for the Guleh Regime, i am sure there would have been little progress in the accelerated volume of import/export of Ethiopia. As a world wide operator of ports from China to Europe and elsewhere, with deep pockets, Dubai Port has to be commended for the improvement of the port at Djibouti and now the dry port at Dualeh. Very few folks remember that the ports at Assab and Massawa needed billions of dollars of investment to reach the level of massive infrastructural investment incurred by Dubai Ports. I will be honest to state that such a doubling and tripling of the volume of external trade was impossible if it were left to Addis or Asmara bureaucrats or Djibouti oligarchs had it not been for Dubai Port. The fact that Ethiopia is paying serious monies is to be expected. but no one can argue with the fact tha the pay is commensurate with the service. This said, it is time for Ethiopian Govt to be biased against Dubai Ports which is mostly owned by the United Arab Emirates, specifically by the Sultan of Dubai, where Ethiopia doesn't even have a diplomatic representative, to speak of. Mind you, we have diplomats from Paris to Bujumbura and Beijing. I am sure Accra and Bulawayo aren't as important as Dubai and Abu Dhabi where aside from the Regime holding our outlet to the sea there are tens of thousands of expatriates who work or slave, either way you put it. I think it is time to reexmaine the relationship between United Arab Emirates which controls Dubai Ports in light of the fact on the ground. The fact that Ethiopian bureaucrats are talking to folks in the ministry of Djibouti is a serious misjudgement. For all practical purpose, the State of Djibouti is " outre mere department" of France along with USA and soon Germany. If memory serves me well even Spain is soon to set up shop there. We need to approach the situation with a new and sophisticated way. For beginners, instead of talking to folks intoxicated by Harar khat and Cognac in Djibouti, we should talk to folks in Dubai and Abu Dabi who are amongst the most progressive in the World. We have to be thankful to them for having invested billions of ollars in modernizing the port at Djibouti. I am sure had we owned it outright, we couldn't have done a fraction of what these folks have achieved. I recall how much the Assab port costed the regimes before this one, in upgrade and etc, in vein. No container ship of significane could dock in there.
My advice to the Ethiopian Govt who seems to be doing great job, overall, is to stop beating the wrong drum. Talk to the Sheiks in Dubai, istead. Open one of the biggest emabassies in Dubai. Give the Emiratis dual citizenship as well as 200 hectare( they number about half a million, if i amnot mistaken) and isolate them from the Qataris and Egyptians who are conspiring against Ethiopia and then you will see that the little money they make from the port facility might even be abolished altogether.
Most things are done in the Middleeast by handshake. How can we shake the hand which is leterally putting the plate on the table if we dont even have a representative in the most important country for our very security and survival- the Dubai Ports de facto proprietors. To try to disuade the chat chewing Issact in the afternoon is in vein. any attempt to persuade the Brits who are running the show from behind the scene is utterly rubbish for no one ever has succeded in that. Trying to talk sense to the wealthy Emiraties is another matter. I am sure one catch more flies with honey. so sweet talk, fellas. Next Call