By: Abdurrahman Shamlan
On Tuesday, the Supreme National Authority for Combating Corruption (SNACC) approved a move to call off a long-standing contract between Aden Port and Dubai-based DP World. Aden Port representatives have stated that they will seek to have parliament annul the business agreement in response to DP World’s having failed to live up to contractual obligations.
In an effort to revamp Aden Port, the Yemeni government leased Aden Port to the world’s third-largest port operator in 2008 in the hope that the company would improve and further develop the port.
In reality, the general situation at Aden Port has gone from bad to worse since DP WORLD assumed operational control. Workers recently initiated a company-wide strike to protest deteriorating conditions at the port, the strategic location of which once made it a primary stop for ships bound for the Suez Canal.
Earlier in the year, the Yemeni Minister of Transport paid a visit to Dubai to inform company representatives that the government wasn’t pleased with an operational state of near-paralysis at the port.
Government officials have stated that DP World has failed to meet its contractual obligations with regard to investment projects and an expansion of the port’s container capacity.
They also accused the port operator of having purposefully attempted to bring operations at Aden Port to a standstill in order to ensure Dubai Port’s top position in the region.
Minister of Transport Waaed Badheeb told Reuters that the company had fallen short of an increased container capacity target, that of 900,000 20-foot equivalent container units (TEUs) by the end of 2011; and also that it had failed to develop and provide adequate infrastructure, as specified in the initial 2008 agreement between the company and the Yemeni government.
For its part, in a recent email statement DP World rejected the allegation that it hadn’t met its obligations, and called such claims baseless and misleading. It asserted that it had met all contractual commitments to the Yemeni government.
Following Badheeb’s raising of the issue, SNACC formed a committee in January to investigate DP World’s adherence to contractual commitments.