Better life without the Emiratis

Two-years after the expulsion of DP-World, Doraleh Terminal is recording outstanding results.

Abdillahi Adaweh Sigad, former Treasury inspector and former Total controller, has been in office for almost two years.  Yasuyoshi CHIBA / AFP

 

Logistics in Djibouti, better life without the Emiratis

February 09, 2020 (Jeune Afrique) – Two years after the expulsion of DP World, the Doraleh Container Terminal is recording outstanding results. A victory for its manager and a revenge for the country.

February 22, 2018 is now a milestone in Djibouti and, more generally, in Africa for the entire port and maritime sector. On that day, the public authorities of the small republic struck hard by unilaterally deciding to terminate the concession contract, signed 12 years earlier, with the port operator DP World for the construction and 30-year management of the Doraleh Container Terminal (DCT). This is an unprecedented nationalization on the continent, the repercussions of which continue to be felt on Djibouti’s quays.

The two former partners are still at loggerheads, and the opinions regularly handed down by the London Court of Arbitration in favour of the operator are only adding fuel to the fire. The Djibouti authorities are responsible for national sovereignty and, prior to any negotiations, they are demanding the disappearance of the contractual clause that gives DP World a port monopoly over the entire Djibouti coastline. After many months of stalemate, discussions have now resumed, but the dispute seems so deep between the two parties that they are more akin to a dialogue of the deaf. The most vexing thing for the Dubaians is to hear that the terminal is now functioning better without them.

“According to the data we got from the embassy, the Djiboutians, quite frankly, did a better job, were more efficient and had better transit than when the Emirates managed the port,” General Thomas Waldhauser, then head of the U.S. Africa Command (AFRICOM), told the U.S. Senate in February 2019.

With 873,648 containers handled at Doraleh in 2019, the terminal recorded a 7.2% increase in its activities in twelve months, which are expected to have increased by 29% at the end of this year, with anticipated volume. above 1.1 million twenty-foot equivalents (TEU). This is a first in the long history of the port of Djibouti.

Even more significantly, ship productivity (calculated on the basis of the number of container movements per hour) is up sharply, while the occupancy rate of the terminal’s berths is down slightly, illustrating better use of its quays. But the statistic most awaited by Djiboutians concerns tran-shipment traffic, a real stumbling block between the Port Authority and its former operator, the former wanting to see the Doraleh terminal become an essential stopover on the major maritime routes of the Gulf of Aden while the latter sought above all to protect the interests of its gigantic facilities at Djebel Ali. And, here again, it is clear that the volumes transiting through the Djibouti quays have never been so high. Limited to 6 per cent during the last months of the Dubai mandate, they accounted for 20 per cent of all container traffic in Doraleh in 2019 and are expected to reach up to 30 per cent this year. DP World’s much-heralded bankruptcy since its forced departure thus continues to be long overdue in Djibouti.

It must be said that the country did not remain inactive, quickly assuming the consequences of its decision. “The terminal was the country’s main asset at that time. It was therefore unthinkable that its activity would collapse. It was up to us to make the necessary efforts to show that we could do at least as well as DP World,” says Abdillahi Adaweh Sigad, who was appointed managing director of DCT in April 2018 and has since become the Société de gestion du terminal à conteneurs de Doraleh (SGTD), whose assets are 67 per cent owned by the Djibouti Port Authority, with the balance, previously in the hands of DP World, is now in the possession of the State.

Abdillahi Adaweh Sigad, a 51-year-old Djiboutian, was not chosen for his knowledge of the marine port sector, but more for his financial skills. The twenty years this training manager has spent with Total have reassured the authorities. And his lightning passage in 2015 as “transitional” financial director of the Port of Djibouti during negotiations on the financing of the Doraleh Muti-purpose Port (DMP), inaugurated two years later, quickly caught the attention of Aboubaker Omar Hadi, the very powerful President of the Djibouti Port Authority.

“Above all, we wanted to make sure that we didn’t repeat past mistakes with our new partners,” explains Abdillahi Adaweh Sigad, who was in accelerated training at the time. So, when the presidency was looking for someone to whom to entrust the destiny, it had itself mapped out for Doraleh, it turned to this former Treasury inspector. Since then, she has never regretted her choice. As soon as he is appointed, the former financial auditor asks his supervisory authority for an autonomy of daily management, “as one does in a company”. In the process, he multiplies studies on infrastructures, equipment, procedures followed, etc…

“The urgency was to identify the challenges to be met in order to provide the most appropriate responses,” says the head of SGTD. The various audits conducted internally confirm “the high level of competence of the field staff, the motivation of the teams and, above all, the quality of the existing infrastructures at the terminal, DP World’s flagship in Africa”, recalls Abdillahi Adaweh Sigad. All that remains is to modernize outdated handling equipment and to extend a storage area deemed insufficient. “It was necessary to give our teams the means to work,” summarizes the man who has already partially solved the problem of deficiencies in handling equipment.

He is now tackling the terminal’s development plan by seeking new investors. He must therefore wait for the settlement of the legal conflict between the Port Authority and his former stevedore. “Many operators are interested in investing directly on the various Djibouti terminals,” explains the DG of SGTD.

Depending on the solution found with DP World, the port authorities are studying two options with the same objective: to develop transhipment activities. “Either Doraleh continues to manage this activity and needs to be expanded, or a new specialized terminal is created,” says Abdillahi Adaweh Sigad. Pending a decision, SGTD has already planned to expand its existing terminals to store empty containers. Two further expansion phases are also planned so that the terminal will be able to receive an additional 500,000 boxes per year by 2022, for a total of 1.4 million TEUs. Then, in the mind of its general manager, the Doraleh terminal will have the means to lead the race in the region. All the more so as DP World, determined to clean up the Djibouti affront, is multiplying competing projects in Berbera (Somalia) and in the Eritrean ports of Assab and Massawa.

For Abdillahi Adaweh Sigad, the essential is elsewhere. “We have shown that by setting clear objectives and following a policy of results, success can be achieved.” The DG of SGTD insists: “Managerial competence exists in Africa. It must be able to express itself and show that by demonstrating ethics and professionalism it is just as credible as anywhere else in the world.”

By O. Caslin

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