Yemen to redo Aden Port deal with DP World

Monday, 9 January 2012 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Yemen will renegotiate a joint venture agreement with DP World to run the Aden container port because the Dubai-based operator has failed to fulfill its obligations, Transport Minister Waaed Bazeeb told Reuters on Thursday.

Yemen inked a deal with DP World, the world’s third-largest port operator, in 2008 to develop and run the port, whose strategic location at the mouth of the Red Sea once made it a vital stop for ships bound for the Suez Canal.

Bazeeb said the company had missed a target of raising container capacity to 900,000 20-foot equivalent container units (TEUs) by the end of 2011, and failed to build and provide infrastructure as specified in the 2008 agreement.

“According to the operating agreement, the company was obligated to raise the number of containers arriving at the port to 900,000 by the end of last year,” he said. “The number is not higher than 140,000 containers.”

Bazeeb said DP World had also failed to build a berth extension and had neglected an obligation to employ 450 workers from the previous port operator.

“Consequently, we have decided to renegotiate with the company regarding fulfillment of its obligations,” he said.

The agreement between DP World, one of the profitable units at indebted conglomerate Dubai World, and the Yemen Gulf of Aden Port Corp stipulates $220 million of investment to develop the port. Officials at DP World were not immediately available for comment. Its shares closed down 2 percent on Nasdaq Dubai.