DP World May Develop $1.2 Billion Port at Banana on Congo Coast
(Bloomberg) -- DP World Ltd. may develop a $1.2 billion deep-water port in the Democratic Republic of Congo, according to documents published by a Senegalese whistle-blowing organization.
DP World signed an agreement with the Transport Ministry in February 2017 giving the Nasdaq Dubai-listed company exclusive rights to negotiate a contract to build and operate a deep-water harbor at Banana on Congo’s Atlantic coast. The accord, released by the Platform to Protect Whistleblowers in Africa on Friday, calls for the creation of a company majority-held by DP World.
DP World is “willing to offer a minority equity stake in the port-operating company” to Congo’s government, according to a letter sent by DP World Chairman Sultan Ahmed Bin Sulayem to President Joseph Kabila on Oct. 4, 2016, and made public by the organization, known by the French acronym PPLAAF.
The country’s existing ports at Matadi and Boma are inland up the Congo River and are incapable of handling traffic from conventional ocean-going cargo liners because of a lack of capacity and draught, according to a PricewaterhouseCoopers study of the country’s infrastructure. As a result, the nation relies on transshipments of cargo from Pointe Noire in neighboring Republic of Congo.
Deepening the antiquated sea port at Banana would provide additional shipping capacity to the mineral-rich nation at a cost of as much as $2 billion and may take as long as 10 years to complete, PWC said. Congo is Africa’s largest copper producer and the world’s biggest source of cobalt.
DP World is “always looking out for the right opportunities,” but it “doesn’t comment specifically on any unless there is something to announce,” a spokesman said in an emailed response to questions. The spokesman declined to confirm the authenticity of the documents published by PPLAAF.
Congolese Transport Minister Jose Makila didn’t respond to calls and text messages from Bloomberg requesting comment.
State-owned DP World proposed establishing a separate management firm that would earn 15 percent of gross revenue generated by the port, according to an annex attached to the sultan’s letter to Kabila. The entity would be controlled by DP World and a private Congolese company, with the parties owning 60 percent and 40 percent respectively, it said.
A final concession contract was scheduled to be signed at an Oct. 28 ceremony, according to an invitation also published by the PPLAAF, a non-governmental organization that supports whistle-blowers in Africa. The signing was canceled at the last minute. The February 2017 agreement allowed for DP World’s exclusivity period, which expired in August, to be extended, though it’s unclear whether it was.
The project is still on the government’s agenda. On Feb. 24, the Council of Ministers agreed to consider the deep-water port initiative “during the next meeting prior to any final decision,” according to a statement emailed to reporters by the office of government spokesman Lambert Mende.
If the development goes ahead, DP World will invest an estimated $1.04 billion, according to a feasibility study prepared by Ocean Shipping Consultants for DP World and submitted to Congo’s Transport Ministry in September. The work schedule involves building the port in four phases, as well as establishing a logistics and free-trade zone. The finished port will have a 1,600-meter (5,250-foot) wharf and the capacity to handle 1.5 million metric tons of general cargo a year, said the study, which was published alongside the other documents.
Congo’s government will be liable for costs of $133.5 million, mainly for the rehabilitation of a road to be used to truck imports and exports between Banana and the interior, according to the study.
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