Construction works for the Berbera Port in Somalia has been rescheduled to kick start this October following a multi billion dollar agreement, signed between Somaliland president Musa Behi Abdi and DP World chairman and Chief Executive Officer Sultan bin Sulayem which sees the start of first phase of the expansion project.
DP World Chief Executive Officer speaking before the official Sultan bin Sulayem signing of the contract said the modernization of the port will see Berbera regain its right as an important port and a critical maritime transportation route.
“Our aim is to make this an important regional hub for the maritime industry in the Horn of Africa,” said the Chief Executive Officer Sultan bin Sulayem.
The Berbera port expansion, will be designed to equip the Somaliland port for major vessels and transform it into one of Africa’s pre-eminent facilities. It is planned to be built on an 800m² area in two phases. Phase 1 estimated to cost US $232m, will sit on an 400m² area and accommodate two vessels at any given time.Total investment of the two phases will reach US $442m.
The expansion includes the construction of additional berths in line with the Berbera master plan, which DP World has started implementing, while adding new equipment to further improve efficiencies and productivity of the port.
Berbera Port historically served as a naval and missile base for the Somali central government. Following a 1972 agreement between the Siad Barre administration and the USSR, the port’s facilities were patronized by the Soviets. It was later expanded for US military use, after the Somali authorities strengthened ties with the American government.
The existing old port facility has a 650m long linear wharf. Berbera’s facility encompasses more than 600m² with terminals for containers, general cargo, an office building and other properties. Ethiopia has acquired a 19% stake in the port, while DP World and Somaliland hold a 51% and 30% stake respectively.
In July 2013, the Raysut Cement company of Oman announced that it is scheduled to build a new state-of-the-art cement terminal at the Port of Berbera. The construction project is part of a joint venture with Somali business partners. It will comprise three silos with a 4000t capacity each, which will be earmarked for storage, packing and distribution of cement.
Regional trade and logistics hub
In May 2016, DP World signed a US $442m agreement with the government of Somaliland to annex and operate a regional trade and logistics hub at the Port of Berbera Somaliland. The project, which will be phased in, will also involve the setting up of a free zone.
As part of the agreement, the government of Ethiopia will also invest in infrastructure to develop the Berbera Corridor as a trade gateway for the inland country, which is one of the fastest growing countries in the world.
The agreement comes as part of a larger government-to-government Memorandum of understanding between Government of the United Arab Emirates and the Government of the Republic of Somaliland to further strengthen their strategic ties.