The Djibouti Ports and Free Zone Authority (DPFZA) has denied DP World's allegations that it illegally seized control of the Doraleh Container Terminal (DCT).
An official statement by the DPFZA stated that the government of Djibouti "asserted its legal right" to assume management of the DCT and end its contract with DP World, adding that the decision was based on recent poor performance of the terminal and to rectify irregularities in the agreement.
The statement added that, "contrary to the statement released by the government of Dubai, the agreement was not for DP World to design, build and operate DCT, but a joint venture between DP World and Port Autonome International de Djibouti."
Before the termination, DP World held 33.33 percent of the shares and Port Autonome International de Djibouti controlled the remaining 66.66 percent.
According to the DPFZA, the original agreement "contained a number of irregularities" and "excluded Djibouti from decision-making processes and the management of the company."
The statement continued: "Since 2008, DCT has achieved only 57 percent of its total volume, despite operating in a favourable import/export environment.
"In the meantime, DP World developed other ports in countries close to Djibouti and used aggressive tactics such as the deliberate slowing of the development of DCT in favour of their main asset at Jebel Ali."
As HLPFI reported here, DP World described the seizure as "illegal" adding that it is "an oppressive and cynical" move in the government's campaign to force DP World to renegotiate the terms of the concession.
The DPFZA has said that it assumed management of the DCT after a breakdown in negotiations to find a settlement.
According to the DPFZA, DP World declared its desire to sell its shares in DCT, but subsequently added a restriction on Djibouti developing new ports on its territory. The government of Djibouti rejected this condition, saying that it found the restriction "a serious threat to Djibouti's national sovereignty."