French company CMA CGM to develop new Djibouti container terminal

Djibouti is under negotiation with a French company to diversify its logistics partners from the east to west.

Recently officials at the Djibouti Ports and Free Zone Authority (DPFZA) told Capital that the government of Djibouti would use more partners for the upcoming mega logistics projects.

Early this week the Chairman of Djibouti Ports and Free Zones Authority (DPFZA), Aboubaker Omar Hadi, stated that Djibouti is working with French shipping company CMA CGM to develop a new container terminal at an initial cost of USD 660 million.

If the two parties conclude their negotiation it would be the first western company to be involved in the investment of the logistics sector in Djibouti. Previously the UAE company, DP World followed by the Chinese giant China Merchants Holdings, invested in the port development project in partnership with the government of Djibouti.

After the decision of the government of Djibouti to terminate the management deal of Doraleh Container Terminal with DP World, western powers expressed their concern in terms of their logistics activity for their military bases if the Chinese company takes over the management of the container terminal; so the latest report would be a relief for them.
In February, Capital quoted the DPFZA Chairman that the country plans to launch the construction of the Djibouti International Container Terminal (DICT) along with some other mega projects.

DICT will be the main project as it would exceptionally boost the country’s exclusive container port terminal facility.This new facility shall be erected between Doraleh Container Terminal, which has changed to the name Doraleh Container Terminal Management Company, and the recently inaugurated Doraleh Multi-Purpose Port (DMP) with a natural water depth of 18.5m. DICT’s total investment is tagged at USD 660 million. The upcoming additional container will have a capacity 2.5 million TEU containers in the first phase.

Aboubaker told Reuters on Tuesday that the authority hopes to award the concession to the French company in July. The new container terminal project could break ground as early as September with construction expected to take 24 months, Aboubaker said, speaking on the sidelines of the Africa CEO Forum in Abidjan, Côte D’Ivoire.

The French company will have a 15 percent share on the DICT. According to the plan, fifteen percent of the project’s cost will be financed through equity. Of that, the DPFZA will contribute 85 percent, with its concession partner providing 15 percent. The rest will be raised via international institutions and banks.

The other project that is expected to be launched in the current month is the construction of Ship Repair and Dry-docks, which will consume USD 200 million, according to the document that Capital obtained from DPFZA.

Djibouti Damerjog Industries Development (DDID) is also the other huge project that the Djibouti government