News of Africa DP WORLD ACCUSED OF “BREACH OF CONTRACT” OVER BOSASO...

DP WORLD ACCUSED OF “BREACH OF CONTRACT” OVER BOSASO PORT

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Garowe (PPM) —  A Puntland MP has accused DP World, the company that operates Bosaso Port, of breach of contract. Abdiasis Sa’eed Ga’amay alleged the breach of contractual obligations on the part of DP World resulted in decline of economic activities in Bosaso.

“Contrary to what the Puntland Minister of Ports said, DP World was in charge of running Bosaso Port before Covid-19  affected the world. The agreement stipulates that P&O “will open an office in Bosaso three months after the signing of the agreement and within twenty four months will build two berths. Puntland business leaders tell us that, due to lack of dredging, sand has filled the harbour.  [The minister] … told us that the Puntland Government has an appointment with DP World but in light of the facts I have shared with you I believe DP World breached its contractual obligations” said Abdiasis.  

In 2017 P&O Ports signed a 30-year concession to manage and develop a project at Bosaso in Puntland State of Somalia. The agreement would enable P&O Ports to commit USD $336M of two-phase investments to Bosaso Port.

Puntland Minister for Ports Mohamed Abdi Osman (left) downplayed breach of contract on the part of DP World brought to the attention of Puntland Parliament by Abdiasis Ga’amay (right).

Puntland State will have to grapple with institutional changes at DP World. In February DP World delisted from Nasdaq Dubai to return to “full state ownership”. The delisting has been necessitated by economic pressures on Dubai whose decision Euromoney described as “a move that directly contradicts the UAE’s efforts to improve liquidity and diversity in its domestic exchanges.”  

Puntland State Government Minister for Ports Mohammed Abdi Osman told parliamentarians “that the first meeting with DP World will revolve around what went wrong. The outcome of the meeting will be either a commitment on the part of DP World to start the project or termination of the agreement”.  

The new status of DP World will affect how projects will be implemented. Puntland State signed a deal with a publicly listed company but it is now dealing with a state-owned company. Puntland State has not so far sought legal advice to figure out where the law of contracts stands on the question of the change in the ownership structure of a company and whether DP World has the duty to inform other parties of what the  delisting will entail. 

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