ARTA (Halbeeg News) – The government of Djibouti has denied allegations that China has forced it to terminate a contract with Dubai based investor.
According to an article published by Xinhua, Djibouti refuted the accusation that the African country was “illegally induced” by a Chinese company to breach a contract with DP World.
The move comes after foreign and local media reported Tuesday that the Hong Kong-based China Merchants Port Holdings Co “unlawfully procured and induced” Djibouti into breaching agreements with DP World, a Dubai company.
Aboubaker Omar Hadi, chairman of Djibouti Ports and Free Zones Authority has dispelled the claims, stressing that Chinese investment is legitimate and helps build a foundation for its economic development.
He added that in 2010, Djibouti also terminated an agreement with DP World on the management of the country’s old port (PAID). All these legal actions started way before the China Merchants Port began investing in Djibouti, he stressed.
Hadi was in Shanghai for the China International Import Expo, which is expected to last from Monday to Saturday.
The government of Djibouti in February terminated the 50-year concession agreement that allowed DP World to control the country’s Doraleh terminal, one of the largest employers in the African country.
The terminal was jointly owned by DP World (33.34 percent) and a Djibouti state-owned entity, PDSA (66.66 percent). In 2013, China Merchants Port Holdings bought 23.5 percent of PDSA from Djibouti and became a shareholder of the port until Djibouti announced it would nationalize the terminal in September.
Djibouti accused DP World, which operates 78 ports in more than 40 countries and regions, of deliberately under-using the facilities in favor of other terminals along the Red Sea, Financial Times reported in October.