Gov’t to investigate the matter
Ethiopia losses its opportunity to the ownership of 19 percent of Berbera Port as the government failed to fulfill certain conditions according to Dr. Saad Ali Shire, Ministry of Finance of the Republic of Somaliland. Ethiopian officials however said that there is no binding agreement to enforce this.
In 2016 after years of serious negotiations, Ethiopia had concluded an agreement with the Somaliland Ports Authority and DP World, which would see the government of Ethiopia getting 19% stake in joint ventures to develop the Port of Berbera; in addition to helping the country get additional logistical gateways for increasing its import and export trade.
“We agreed in a meeting back in 2016 to offer a 19% share to the Ethiopian government under certain conditions,” said Dr. Saad Ali Shire, Ministry of Finance of the Republic of Somaliland, adding, “There was a stop date for the Ethiopians to act, but they didn’t act so it expired.”
In 2016/17 it was reported that DP World held a 51 percent stake in the project, Somaliland 30 percent and Ethiopia the remaining 19 percent. The government of Ethiopia was also expected to invest in infrastructure to develop the Berbera Corridor as a trade gateway for the inland country.
As the minister indicated, one of the conditions was for Ethiopia to contribute financially to the construction of the port but it didn’t take up that option, “The port was financed entirely by DP world and now it’s ready.”
Officials from the Ethiopian government who chose to stay anonymous said that even if the three parties agreed on the ownership, there wasn’t any legal binding document signed by the parties, yet it included financial contribution to the construction.
“Even though Ethiopia lost its ownership, the government of Somaliland didn’t officially inform the government,” said the official.
Currently, DP World owns 65 percent of the port, while the remaining is owned by the government of Somaliland.
According to Dina Mufti, spokesperson of Ministry of Foreign Affairs on his weekly press briefing explained that the government still didn’t have any information but has started its investigation.
“Any changes in the concession with regard to giving shares to other parties would have to go through parliament. It’s not an executive issue; it is a legislative one,” said Somaliland’s Finance Minister in an interview with Capital.
“I believe that the important thing is not so much the ownership, but the efficiency which is very important because we would like Berbera to offer the most efficient service in the horn of Africa. So our aim is really to provide an efficient service, it doesn’t matter who owns it,” the Finance Minister added.
Currently, Ethiopia is mainly using ports in Djibouti, while Berbera has served as a way to import aid cargos in the past years.
As Said Hassan, General Manager of Somaliland Port Authority said, the two countries are in discussions to unlock transport of commercial good, “As part of the discussion to complete the transit agreement officials of the Ministry of Transport of Ethiopia will arrive at Berbera at the end of the coming week,” said Said, expressing his hope that it would come to fruition this year.
DP World agreed with the government of Somaliland to invest USD 442 million for the expansion of the old port and development of other facilities.
Presently, the first phase of the expansion project has been completed with operations starting last year July which resulted in the upward capacity from 100,000 TEU to half a million. “So far, DP world has spent approximately 214 million US dollars. We committed to invest up to 442 million US dollars and when we took over the port on March 2017. Following the takeover, we started the expansion project in October 2018,” said Supanchia Wattanaveerachai, CEO of DP world Berbera.
The company is also working to establish an economic free zone to complement the development of the Port of Berbera. As the CEO indicated, the first phase construction of the special zone is expected to be completed at the end of the year.
“The special economic zone is a combination of the increased Berbera port development and will support Somaliland and Ethiopia as it seeks to bolster the export competitiveness of the country,” said Somaliland’s Finance minister.
Somaliland was granted independence on June 26, 1960 from the British colony and immediately recognized by the UN. It then unified with Italy Somaliland, who got independence on July 1, 1960, and formed the then Republic of Somalia.
Berbera port is probably the best location for the eastern part of Ethiopia. The berbera corridor road upgraded project and the Hargeisa Bypass road Corridor will link to the existing modern highway on the Ethiopian side of Somaliland and position Berbera as a direct fast and efficient trade route for Ethiopia, which present an array of benefits to this regard.
The Dubai Company that has been operating a port in Djibouti has agreed with the self-proclaimed Somaliland from Somalia to manage the operation of Berbera Port, one of the oldest ports in the region.