Berbera to vie for Ethiopia’s cargo business
As Somaliland inaugurates its new president, DP World, leading logistic and maritime transport company, is to set to commence with the first phase of the Berbera Port expansion project early next year, The Reporter learnt.
We are now finalizing the bidding process for the construction work and will soon issue official notice to winner, Supachai Wattanaveerachai, CEO of DP World Berbera project, told The Reporter.
The new quay will rest on 400 meters which is expected to increase the capacity of the port significantly.
It is to be recalled that in May 2016, DP World signed an agreement with Somaliland government to manage the Berbera Port facility. The two came to terms in such a way that DP World is to manage the port facility under a 30-year contract and co-invest in the 442 million dollars total outlay.
The agreement was signed by Somaliland's foreign minister, Saad Ali Shire (PhD), and Sultan Ahmed Bin Suleiyman, CEO for DP World.
Following the agreement, it was announced that Ethiopia would have a 19 percent stake in the port.
The port will be a good option for Ethiopia’s cargo (import/export), said Abdirhman Ahmed (Capt.), harbor master at Berbera Port Authority.
Currently, 98 percent of Ethiopia's cargo load is catered for by Djibouti Port while the rest two percent is shipped through Berbera. Still, Ethiopia’s cargo via Berbera Port is largely composed of food aid.
For many years, it is only organizations like the World Food Program (WFP) that are using the port, according to Abdirhman.
But now, following the arrival of DP World, businesses from Ethiopia are starting to consider the port facility, he said.
Following the port management agreement, DP has made some adjustments to the facility. In this regard, DP has started to upgrade its port facilities; introduce new equipment such as three reach stackers and four empty handlers. It is also expected that ten Inter Terminal Vehicles, five forklifts and cranes will arrive at the port facility in the coming months.
Having this, DP has managed to increase the general cargo volume handled by Berbera Port by 30 percent since 2016. It also increased the productivity of the five berths the port currently has.
The first Port facility was built at Berbera by Soviet Russia in 1968. Later on, in 1984, the Americans constructed another quay just near to the one built by USSR.
Currently, the port has five berths which is still less in comparison to Djibout Port. At its current capacity, Berbera handles up to 11,000 containers per month.
Berbera is located 930 kilometers from Addis Ababa but much more closer to the Eastern part of Ethiopia.
"As far as the logistic cost is concerned, we have comparative advantage over the Djibouti facility," said Supachai.
Once the expansion project is complete, Ethiopia is expected to divert up to 40 percent of its cargo shipment via Berbera Port.
Established in1972, DP World operates 77 marine and inland terminals across the world. In 2015, the company handled a total of 61.7 million 20ft containers.
Along with the expansion of the port, DP and Somaliland have agreed on the development of new free economic zone which will complement the port facility. In addition, there will be a new road through the town of Togo-Wuchale which will connect Ethiopia to Somaliland. The current road between Hargessa and Berbera is also under renovation.