Ministry of Transport of Ethiopia and DP World sign MoU for the development of the Ethiopian side of the Berbera Corridor
DP World, a leading global provider of end to end logistics solutions, and the Ministry of Transport, have signed a Memorandum of Understanding (MoU) with the aim of developing the Ethiopian side of the road linking Ethiopia to Berbera into one of the major trade and logistics corridors of the Country’s international trade routes.
The MoU, which was signed in Addis Ababa today by Her Excellency, Dagmawit Moges, Ethiopia’s Minister of Transport, and Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World, follows a decision by the two parties to explore the potentials for developing logistics infrastructure and the provision of end to end logistics services along the corridor to unlock major economic benefits for Ethiopia.
In terms of the MoU, it is proposed that the Parties would establish a joint venture logistics company to perform logistic operations from origin to destination. It is intended that for export, DP World will offer services from origin in Ethiopia up to Berbera Port, while for imports, it will offer from the port of loading to the delivery of shipments in one of the dry ports in the hinterlands or the final destination of the consignees.
DP World and its partners envisage investing up to US$1bn over the next ten years in developing the supply chain infrastructure along the corridor. This will include dry ports, silos, warehouses, container yards, cool and cold chain depots, freight forwarding and clearing activities. The infrastructure investment will be in parallel with the implementation of the latest IT infrastructure and technology to ensure the efficient functioning of the corridor, and smooth, secure and transparent transfer of cargo throughout the entire transportation journey.
The MoU also envisages that the Ministry of Transport will see to it that a review and resolution of regulatory obstacles facing the Ethiopian side of the Berbera Corridor are exercised with a view to ensuring competitive arrangements for logistics companies so that they could be able to use the Corridor on a common user basis.
Speaking at the signing, H.E. Dagmawit Moges, Ethiopia’s Minister of Transport, said: “As we kick off the journey towards prosperity, aiming at unlocking Ethiopia’s development potentials designed to propel the country into becoming an African beacon of prosperity, the transformation of the logistics industry is expected to play the leading catalytic role. Ethiopia aims to diversify its port access facilities and services to improve its trade corridor access routes; utilizing the Berbera corridor will surely have a potential to make Ethiopia a front runner in logistics operations, boosting the competitive advantage of delivering our products to the world market. The development of this Corridor will not only meet with the growing demand of Ethiopian’s international trade, but it would also enhance our Nation’s capacity in utilizing our existing major corridor both in terms of volume of trade and efficiency.”
Sultan Ahmed Bin Sulayem, Group Chairman and CEO of DP World, said: “As a leading global provider of trade and logistics solutions, we strongly believe that developing the Berbera Corridor into one of the major trade and logistics corridors will unlock huge economic benefits for Ethiopia, and support its ambitious development plans. It will create new jobs, attract new businesses and investment along the corridor, as well as diversify and strengthen the country’s access to international trade by having a direct, seamless and efficient link between Ethiopia and Berbera Port.”
The road infrastructure that will connect Berbera Port to Wajaale at the border with Ethiopia, funded by the Abu Dhabi Fund for Development and the UK’s Department for International Development, is expected to be completed by the end of 2021. The road will link to the existing modern highway on the Ethiopian side and will further position Berbera as one of the key trade gateways in the region and will be one of the fastest and most efficient routes for Ethiopian transit cargo.
DP World has committed to investing up to US$442 million to develop and expand Berbera port, with the first phase nearly completed. Further work is already underway on expansion of the quay to 1000 metres which will increase capacity to two million TEUs, operated by 10 quay cranes.