DP World Strategic Interest in Berbera

[Salah Al-Din]

Special interview given by the head of #DP #World - Dubai based ports operator- Sultan Ahmed Binu Suleiman regarding company’s presence in Africa and the reasons that prompted its recent Concession Agreement with #Somaliland giving it the rights to manage and develop the Port of #Berbera for the next 30 years

Video is found here:
https://www.facebook.com/SIIInstitute/v ... 868127234/

The neo-faqash think DP World/UAE will stop this investment along with the base simply because Farmaajo is president. They obviously have no idea how delusional they sound.

[X.Playa]

If only tge wariye shuts the fuck up so i can hear what the Arab is saying. Some spmali journalist are ridiculous. Basic trainng first sat the entire news and then let the man talk. Why like a translator you have to air word by word

[Salah Al-Din]

Essentially, the deal is between Somaliland, UAE & Ethiopia. The UAE is interested in the 90 Million Ethiopian market and know Djibouti alone cannot meet the demand. The Ethiopians would rather deal with Somaliland rather than Eritrea. They influenced the UAE to choose Berbera over Asmara. This is the epitome of the interest of Somaliland and the UAE/Ethiopia lining up. The only one countries that are angry about this is Somalia & Djibouti but fortunately for Somaliland they can't do anything.

The plan is to make Hargeisa the political capital and Berbera the commercial capital. To complete the Berbera corridor to serve not only Ethiopia but South Sudan.

Already after the deal has been signed between Somaliland & UAE you can now buy tickets to Hargeisa from anywhere around the world from emirates.com which outsources the Dubai -Hargeisa leg to Fly Dubai. So you buy one ticket on Emirates.com from New York to Dubai to Hargeisa, London to Dubai to Hargeisa, or Toronto to Dubai to Hargeisa. The first leg of the trip is with Emierates and the second leg is with Fly Dubai. The incentive is the ticket is much cheaper compared to when purchasing 2 tickets in the past.

Now Hargeisa has 2 competing airlines, Emirates and Ethiopian Airlines. All the waloweyn/neo faqash have to go through Hargeisa to get to where they want to go. Hargeisa will be the center of the universe for all things Somali. The alternative for them is to take TurkishAirlines, but they'll forever be on lay over after lay over after lay over. Some one coming from North America will be travelling between 26 hours and 39 hours on Turkish Airlines as opposed to as little as 16 hours for Ethiopian/Emarites. Also, it cost a lot more to take Turkish Airlines than Ethiopian or Emirates.

The game has completely changed. I'm sure Osama & Co. have benefited but we as Somalilanders have to look at the grand scheme of things. Already my ticket to Hargeisa is cheaper. The security of Somaliland is bolstered and its economic potential is being developed. It is a win, win, win, win situation for every one.

[X.Playa]

I know a bit or two about economics as a former student of that science. I have yet to be convinced of how SL will benefit from trade between UAE and Ethiopia.

The port is essentially sold to UAE for 30 years , they will build a road from Berbera to Ethiopia border . Cargo arrives in Berbera and gets ferried to Ethiopia the custom will be levied by DP the SL government has no say on how much DP will charge its citizens.

Its funny onesided deal. I don't care if 35 years down the road there is a pie in the sky I know how companies recover their cost and either SL population has to pay or Ethiopia has to pay and it looks like we are loosing in two fronts. First our people will be charged port fees and our government which earned at least 40 million a year will loose that much and DP is only payibg 440 million for the port thats only 10 years of cost recovery. DP will at leadt eran 20 billions in 30 years .

Its a fucked up cheap deal. Am not convinced at all.

[Salah Al-Din]

The below is an old article but it highlights the details of the deal:

http://www.thenational.ae/business/ship ... r-dp-world

According to Mr bin Sulayem, Berbera port will become a hub and sea route for the Ethiopian market primarily, which is one of the world’s fastest-growing economies and is in need of improved infrastructure and facilities to keep up with the rate of expansion.

Now, having studied economics you know that the way to stimulate the economy is through infrastructure spending. The old age of "if you build it they will come" rings true here. Already Berbera's land value has started to increase. As I mentioned travelling to Hargeisa/Berbera has become that much more easier. This economic activity will spur growth and will bring further foreign direct investment into the country.

Not to mention the Somaliland Government's 35 % ownership of the new management of the port. Economies of scale dictate that the having a smaller percentage of a large pie is better than a greater percentage of a small pie.

Let's take your 40 Million dollar example. The port does not handle more than 40,000 containers a year. It is projected to increase to 200,000 containers a year. This means that for each container Somaliland used to get 1,000 [40,000,000 (revenue)/40,000 (containers)]. However, when we reach the 200,000 containers per year Somaliland will receive 70,000,000 a year [200,000(containers)*1000(revenue per container)* 35%.

Any which way you look at it, this is a good deal. Today, tomorrow and the future. The only thing is could we have gotten a better deal. Definately. However, this is the deal we have and I believe a 35 % of something is better than 100% of nothing.

[X.Playa]

You missed my bigest worry and that is in the event of these projection failing the burden of cost recovery will land on us SL. Containers been imported to SL will be more expensive then Ethiopian one. The later have more leverage on DP and there is no binding agreement forcing Ethiopia to only use Berbera in the event of disputes they can gp to Jabuuti. We don't have that leverage nor choice we would be forced to pay whatever DP chargs.

[Salah Al-Din]

You are right there is always an issue with projections not materializing; however, beggars cannot be choosers. Things are moving fast. You have to be nimble and roll with the times. You do not become advanced without first getting exploited. It is even more disadvantageous being an unrecognized country.

Further, without risk there is no reward. Sitting idly by is not the way.

[bumps]

I wished Somalia's government could've stop this deal.. There is no benefits for Somalila