Berbera Port Construction Project
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ZodiaK
VIP
Today, the port of Berbera is defined by its three brand-new “economic giraffes”, or gantry cranes, part of a $442-million investment by Dubai Ports World, which has driven up container capacity five-fold to 500,000 annually and doubled the volume of general cargo to two million tons. Another 400m has been added to the quayside. This is part of a three-phase plan which will result in a two-million container capacity by 2026, along with four million tons of general cargo.
But that is only part of the story.
Ports are not fundamentally about hardware, but about efficiency. Berbera’s services have improved four-fold in the last five years to 30 berth moves per hour and aim at 100 in the next four years, to place it alongside Djibouti and Mombasa as the continent’s most efficient ports.
Already, Berbera ranks 184th on the World Bank’s port efficiency rankings. Durban is at 364 and Cape Town at 365 (out of 366) – below the likes of even Lagos and Dar es Salaam, and above only Luanda. Yet South Africa’s GDP is, at $5,000 per capita, nearly 10 times that of the average Somalilander.
This is key to an objective to turn Berbera into the port of preference, not just for import-hungry Ethiopia – the 120 million person, one million container market on its border – but as a trans-shipment hub for the region and into the Gulf of Aden.
The Dubai investment in the harbour is complemented by a $90-million aid project, led by the UK and the United Arab Emirates, to rehabilitate the 250km from Berbera to Wachaale near the Ethiopian border town of Jigjiga. Now under the management of an Abu Dhabi company, Berbera airport has been refurbished and its runway resurfaced.
This has been against the odds.
But that is only part of the story.
Ports are not fundamentally about hardware, but about efficiency. Berbera’s services have improved four-fold in the last five years to 30 berth moves per hour and aim at 100 in the next four years, to place it alongside Djibouti and Mombasa as the continent’s most efficient ports.
Already, Berbera ranks 184th on the World Bank’s port efficiency rankings. Durban is at 364 and Cape Town at 365 (out of 366) – below the likes of even Lagos and Dar es Salaam, and above only Luanda. Yet South Africa’s GDP is, at $5,000 per capita, nearly 10 times that of the average Somalilander.
This is key to an objective to turn Berbera into the port of preference, not just for import-hungry Ethiopia – the 120 million person, one million container market on its border – but as a trans-shipment hub for the region and into the Gulf of Aden.
The Dubai investment in the harbour is complemented by a $90-million aid project, led by the UK and the United Arab Emirates, to rehabilitate the 250km from Berbera to Wachaale near the Ethiopian border town of Jigjiga. Now under the management of an Abu Dhabi company, Berbera airport has been refurbished and its runway resurfaced.
This has been against the odds.
ZodiaK
VIP
The Leader of the Opposition in the South African Parliament, John Steenhuisen MP writes Port of Berbera in Somaliland shows the true value of doing over dithering
Somaliland stands out as a country which has developed its own peace model, from the bottom up, one reason why it holds. Despite its devastating civil war inheritance, Somaliland has become the ‘country that can’ in Africa.
Part of their success is their ability to make better choices for the future of their country and then to execute these with a determination which brings me back to the Port of Berbera. Realizing that the port was a strategic asset that had been muddling along inefficiently under the control of the state entity, the Somaliland Port Authority (SPA), a decision was made to unlock the potential and concession the port long-term to an International operator.
A deal with Dubai Ports World was based on a 30-year concession in a 65:35 joint venture with the SPA. The result has been a massive expansion in port capacity, currently in phase 2 of the development. Phase 1 attracted over US$244 million of investment in infrastructure, equipment, and systems.
On top of this, there has been a doubling of the tonnage of general cargo, break and break bulk, and a massive five-fold increase in container handling capacity to 500,000 TEUs annually. Phase 2, currently underway, will see container capacity again quadruple, and the quayside and handling facilities further expand with a further $200 million of investment.
But it’s the improvement in efficiency which is most impressive. Berbera is now ranked at position 184 on the World Bank’s index of port efficiency. South Africa’s ports languish at the bottom of the table with Cape Town at position 365. That our ports are being outperformed by a port in a tiny unrecognized country which spent years ravaged by war should be a serious wake-up call as to just how far behind we are.
The most remarkable part of this is that the timeline for Somaliland to rack up this incredible achievement was a mere three years from the day that the Somaliland Parliament passed the enabling legislation. Three years! Just let that sink in, I can’t think of a single major government project in South Africa that has come even close to a delivery timeline like this.
On the contrary, projects like Medupi and Kusile have dragged on for decades, massively over budget and of course with all the requisite price gouging and rent-seeking along the way. The difference is that a decision was made and it was actioned, with no endless workshops, presidential commissions, and interminable RFI, RFP, BEE processes that have become the norm in South Africa.
So what does Berbera have to do with South Africa?
Well, firstly it’s a wake-up call that we had better up our game and do something about our ports or else we stand to lose out to other more efficient ports on the continent. Secondly, sentiment and the romantic notion of some South African exceptionalism isn’t going to cut it. We need to live in the present, not in past glories. Our future lies in efficiency, price, and service. We are lagging far behind on all of these. Thirdly the model used by Somaliland shows the value in government letting go and allowing in private sector expertise and efficiency to displace government malaise and inefficiency.
There is no way that Portnet and Transnet are going to be able to do what needs to be done. While ideologically understandable, the government keeps trying to breathe life into these putrefying corpses and it’s simply an unjustified waste of the public’s good money. We should be seeking instead to emulate the Berbera model in all our ports.
On my recent visit to the NAMPO agricultural show, port efficiency was a common theme that came up in my various discussions with agricultural producers. Billions of Rands in trade are lost every year as port inefficiency is allowed to continue and our agricultural products rot at the quayside, destroying incomes and revenues as well as jobs. Local retailers and businesses too are not immune, with long delays for their goods to be landed and cleared, ironically with some of the most expensive port handling charges in the world.
The time for talking about reform has surely ended. It is now time for action. Instead of more commissions, task teams, and presidential units (there are now over 27 at last count!), it’s time to start implementing. A good start would be, to begin with the low-hanging fruit. Getting some of our 740 moribund state-owned entities out of the way, starting with our ports, could finally begin unblocking the obstacles they have put in the way of real expansion and growth. Concessioning our ports in public-private partnerships with international experts and all the potential this offers shouldn’t take another decade of dithering.
The Somaliland example shows us, with the right decisions, the rewards of reform can be quickly reaped. With such leadership, we too could become a ‘country that can’.
bidenkulaha
GalYare
0117
Reborn
This is old news just being circulated again after an interview by the finance minister.
ZodiaK
VIP
ADDIS ABABA – The Somaliland port, Berbera, might be located at a hotspot for the East African region but the area had been underutilized for years considering its potential to serve as a hub for the region.
The internationally well-accomplished company, DP world has set out to make the Berbera port the go-to choice for east African customers. Elevating the port’s capabilities to suit the needs of landlocked countries within the region while contributing to Somaliland’s annual income as well as economic status.
Starting from 2017, DP World has been working tirelessly to regain and revamp Berbera’s status as an international trade center. The company managed to acquire a 30‐year concession with an automatic 10‐year extension to develop a state-of-the-art logistics platform and free zone with a capacity of harboring 2 million TEU in the container terminal.
DP world delivers these services through an interconnected global network of 128 business units in 60 countries across six continents, with a significant presence both in high-growth and mature markets.
On top of making Somaliland one of the top regional giants in trade and logistics corridors, DP world’s project has created over 2,750 permanent and casual positions for Somaliland nationals in addition to directly contributing to the country’s economy.
DP World has gone above and beyond to positively contribute to the lives of the local community that it has invested $6 million in sustainable projects that built centers for education, health, water, and mosques in an attempt to make the country hospitable and welcoming.
One of the biggest benefits for the region is creating an alternate more efficient port for the region’s most populous country, Ethiopia. DP World is taking part in the construction of the Berbera to Addis Corridor which easily connects the two countries through Hargeisa, for smoother trade activity. The Somaliland port which is in closer proximity to Ethiopia will serve as a more efficient route than the Djibouti line Ethiopia currently uses.
The Berbera Corridor Road upgrade project was being funded by the Abu Dhabi Fund for Development (ADFD) and the UK’s Department for International Development (DFID), and the Hargeisa Bypass Road funded by UK Aid.
The project is on the cusp of completion; having been set to be finished in quarter four, 2021, and quarter three 2022, respectively. The road will link to the existing modern highway on the Ethiopian side and position Berbera as a direct, fast, and efficient trade route for Ethiopian transit cargo.
“We believe that Ethiopia needs multiple gateways of trade, 95 % of Ethiopian cargo is made through Djibouti and if we were to look at Berbera 5 years ago it did not have the capacity to support the needs of Ethiopia. But today we have the capacity to support 500,000 TEU, meaning we can be an alternative port for the country,” said Supachai Wattanaveerachai the CEO of DP World Berbera.
Keeping the opportunity the port holds for the land-locked Ethiopia in mind, DP world hosted a group of Ethiopian journalists at the port to further elaborate on the potential it has to become a key maritime gateway for the country. DP world highlighted the Berbera special economic zone (BSEZ), which is modeled on DP world’s Jebel Ali free zone and aims to attract investments while encouraging trade that would position Berbera as a gateway port for the region.
The economic zone, strategically located, is linked to the port and will serve as a center of trade with the aim to attract investments. It targets a range of industries, including warehousing, logistics, traders, manufacturers, and other related sectors.
The port, with a capacity of 500,000 TEU, was officially opened for use in 2021.
Since its launch, DP World has made major amendments that add to the quality and capability of the port. The new terminal was officially opened by His Excellency Muse Bihi Abdi, President of Somaliland, and Sultan Ahmed bin Sulayem, Group Chairman and CEO of DP World, at a special event attended by over 200 guests, including a government delegation from Ethiopia, led by their Excellencies Ahmed Shide, Minister of Finance and Dagmawit Moges, Minister of Transport.
The event also included a symbolic ground-breaking for the new Berbera Economic Zone, the first phase of which was under construction back then.
The internationally well-accomplished company, DP world has set out to make the Berbera port the go-to choice for east African customers. Elevating the port’s capabilities to suit the needs of landlocked countries within the region while contributing to Somaliland’s annual income as well as economic status.
Starting from 2017, DP World has been working tirelessly to regain and revamp Berbera’s status as an international trade center. The company managed to acquire a 30‐year concession with an automatic 10‐year extension to develop a state-of-the-art logistics platform and free zone with a capacity of harboring 2 million TEU in the container terminal.
DP world delivers these services through an interconnected global network of 128 business units in 60 countries across six continents, with a significant presence both in high-growth and mature markets.
On top of making Somaliland one of the top regional giants in trade and logistics corridors, DP world’s project has created over 2,750 permanent and casual positions for Somaliland nationals in addition to directly contributing to the country’s economy.
DP World has gone above and beyond to positively contribute to the lives of the local community that it has invested $6 million in sustainable projects that built centers for education, health, water, and mosques in an attempt to make the country hospitable and welcoming.
One of the biggest benefits for the region is creating an alternate more efficient port for the region’s most populous country, Ethiopia. DP World is taking part in the construction of the Berbera to Addis Corridor which easily connects the two countries through Hargeisa, for smoother trade activity. The Somaliland port which is in closer proximity to Ethiopia will serve as a more efficient route than the Djibouti line Ethiopia currently uses.
The Berbera Corridor Road upgrade project was being funded by the Abu Dhabi Fund for Development (ADFD) and the UK’s Department for International Development (DFID), and the Hargeisa Bypass Road funded by UK Aid.
The project is on the cusp of completion; having been set to be finished in quarter four, 2021, and quarter three 2022, respectively. The road will link to the existing modern highway on the Ethiopian side and position Berbera as a direct, fast, and efficient trade route for Ethiopian transit cargo.
“We believe that Ethiopia needs multiple gateways of trade, 95 % of Ethiopian cargo is made through Djibouti and if we were to look at Berbera 5 years ago it did not have the capacity to support the needs of Ethiopia. But today we have the capacity to support 500,000 TEU, meaning we can be an alternative port for the country,” said Supachai Wattanaveerachai the CEO of DP World Berbera.
Keeping the opportunity the port holds for the land-locked Ethiopia in mind, DP world hosted a group of Ethiopian journalists at the port to further elaborate on the potential it has to become a key maritime gateway for the country. DP world highlighted the Berbera special economic zone (BSEZ), which is modeled on DP world’s Jebel Ali free zone and aims to attract investments while encouraging trade that would position Berbera as a gateway port for the region.
The economic zone, strategically located, is linked to the port and will serve as a center of trade with the aim to attract investments. It targets a range of industries, including warehousing, logistics, traders, manufacturers, and other related sectors.
The port, with a capacity of 500,000 TEU, was officially opened for use in 2021.
Since its launch, DP World has made major amendments that add to the quality and capability of the port. The new terminal was officially opened by His Excellency Muse Bihi Abdi, President of Somaliland, and Sultan Ahmed bin Sulayem, Group Chairman and CEO of DP World, at a special event attended by over 200 guests, including a government delegation from Ethiopia, led by their Excellencies Ahmed Shide, Minister of Finance and Dagmawit Moges, Minister of Transport.
The event also included a symbolic ground-breaking for the new Berbera Economic Zone, the first phase of which was under construction back then.
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