23 February 2018

Djibouti: The Government of Djibouti Ends DP World's Concession Contract

press release

Djibouti, 23 February 2018 -   Pursuant to the law of 8 November 2017 on strategic infrastructure contracts, the Government of the Republic of Djibouti has decided to proceed with the unilateral termination, with immediate effect, of the concession contract awarded to DP World for the operation of the Doraleh Container Terminal (DCT).

In terms of strategic infrastructure contracts, the 8 November 2017 law is designed to protect the nation’s best interests, especially those relating to state sovereignty and economic independence. It establishes a legal framework that allows for the renegotiation, when required, of concluded contracts bearing on the management or operation of strategic infrastructure. The law also authorizes the government to terminate the contracts in question.

The Doraleh Container Terminal (DCT) concession agreement contains elements in flagrant violation of the sovereignty of the State and the best interests of the nation.

These factors have been discussed on several occasions with the management of DP World.

Since 2012, the Republic of Djibouti has tried everything within its power to renegotiate this leonine contract without calling into question the interests of its partnership with DP World and the development objectives of Djibouti’s port activity.

Good faith attempts by the Government of Djibouti and its representatives to reach a negotiated solution or to resolve the issue amicably have been rejected without reason by the management of DP World.

The latest attempt, dated 1 February 2018, was answered only by a resolution taken by DCT's board of directors in which the state of Djibouti, the 66% majority shareholder of DCT, will be contested in new arbitration procedure without its consent.

As a result and in accordance with the law of 8 November, the government today issued a decree terminating the concession.

As stipulated by the law of 8 November, normal compensation procedures will be implemented.

The Government of the Republic of Djibouti has henceforth taken over the management of the terminal. The decree authorizes the requisition of all the goods and personnel essential to the running of DCT. The decree also authorizes the automatic transfer of all contracts and personnel necessary for the operation of the terminal.

The Government of the Republic of Djibouti assures all partner operators, associated companies and site employees of its commitment to maintaining continuity of service and to developing Doraleh’s port activities.

DCT is an instrument essential to Djibouti's economic strategy. As always, the government’s goal is to continue the development of the site, for the benefit of Djibouti and its citizens.

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