Sunday, August 28, 2016

Somailand parliament approves the deal with DP World over Berbera port

(MoFA)- On 4 August, the Somaliland Parliament approved a landmark deal between the Government and Dubai Ports World of the United Arab Emirates to manage and develop the port at Berbera.

 Following a robust debate, the Parliament approved it by sixty-nine votes to three. The deal between Somaliland and DP World is valued at $442 Million over 30 years.

The agreement forms part of a larger government-to-government Memorandum of Understanding between the Emirate of Dubai and the Government of the Republic of Somaliland. The deal will spur cooperation in a number of areas ranging from agriculture, tourism, and energy to industry and trade in addition to management and development of the port itself. It will also involve the setting up of a 300 km2 free zone to help support the development of Berbera’s trade corridors.
The dealis vital for Somaliland’s future economic development and will turn Berbera into a regional logistics hub, and encourage investment in the road corridor that links Berbera with Ethiopia. This will reduce Ethiopia’s dependence on Djibouti as an outlet to the sea. Ethiopia is growing rapidly and has committed to bring up to 30%of its exports and imports through Berbera. The development of Berbera is therefore a vital part of efforts to pursue closer regional economic integration between East African countries including Somaliland. It is also yet another sign that, 25 years after reclaiming independence, Somaliland is increasingly being treated as a sovereign state.
The Somaliland government considered several potential bids before ultimately agreeing to DP World’s offer. It received extensive legal and accounting advice from reputable international providers.Minister of Foreign Affairs Dr.Saad Ali Shire said that the government had chosen DP World’s offer because “it represented a better deal for the people of Somaliland than any other, offering the prospect of a comprehensive development compact in addition to fair and attractive terms for the management of the port.” DP World’s proven record in developing port and in pioneering the use of free-zones also contributed to the government’s decision.
The government understands that existing port workers may be worried about the impact of the deal on jobs in the area. It is confident that the deal will in fact create many additional jobs, attract further investment from other countries and encourage economic diversification. The Government will embark on talks with local communities in order to show how the benefits of Berbera’s development will be shared by local communities across the country.The Government also plans to engage in talks with neighbours and international partners in order to raise awareness and promote understanding of the deal.
-MoFA Somaliland