Bloomberg News

Djibouti to Double Capacity at Doraleh Container Terminal

March 12, 2012

Djibouti will invite bids to expand the Doraleh Container Terminal, partly owned by DP World Ltd. (DPW), in the fourth quarter, the Port and Free Zone Authority said.

Capacity will double to 3 million TEU containers, or twenty-foot equivalent units, annually once the $300 million expansion project is completed by 2015, Aboubaker Omar Hadi, chief executive officer of the authority, said in an interview today in Nairobi, Kenya’s capital.

“We are in talks with China, the World Bank and African Development Bank on the project,” Hadi said. “Djibouti is a small market but we are increasing traffic to the hinterland.”

Djibouti’s $982 million economy relies on services related to its strategic location on the Red Sea, one of the world’s busiest shipping lanes. The country, with a population of less than 1 million, hosts about 2,500 personnel at a U.S. military base and it’s used by foreign navies patrolling shipping lanes in the Gulf of Aden and the Indian Ocean for Somali pirates.

The main port is used to ferry shipments in and out of landlocked neighboring Ethiopia and is a hub for trans-shipment trade off Africa’s eastern coast through to Durban, South Africa, Hadi said.

Djibouti also plans to build as many as five new ports, including one in Tajourah that will handle mineral and potash exports from neighboring Ethiopia, Hadi said. That will cost $180 million and should be operational by 2015, he said. Another port is planned in Ghoubet for salt sales abroad, he said.

Djibouti aims to increase refined oil storage at Doraleh by one-third by mid-2014 and build a facility to handle crude shipments after signing a memorandum of understanding last month with South Sudan on construction of an oil pipeline, Hadi said.

DP World, the Dubai government-controlled port operator, and Djibouti formed a joint venture in 2000 to develop the Doraleh terminal with the signing of a 20-year concession.

To contact the reporter on this story: Sarah McGregor in Nairobi at smcgregor5@bloomberg.net

To contact the editor responsible for this story: Paul Richardson at pmrichardson@bloomberg.net


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