The Dubai-headquartered terminal operator said it had reached the decision not to renew operating contract for PT Terminal Petikemas Surabaya (TPS) when its current agreement expires in 2019.
DP World said that the new contract offered by the Indonesian authorities did not meet its requirements for continued investment. The terminal is in Tanjung Perak the world’s 47th largest container port.
Sultan Ahmed Bin Sulayem, DP World group chairman and ceo, noted the contributions of DP World and other terminal operators in building up Indonesia’s infrastructure.
“It is unfortunate that the significant positive contributions made by global terminal operators in Indonesia have not been fully recognised, despite our successful track record. We are therefore disappointed that the operating contract renewal terms offered by the Indonesian authorities did not meet our threshold for continued investment,” he said.
“Adhering to strict financial discipline has been crucial to the growth of DP World and on that basis we are not able to renew the agreement beyond 2019. The transfer of operations will be in accordance to the terms and conditions of the contract.”
DP World has a 49% stake in TPS which has a capacity of 2.1m teu.
The terminal operator said the decision would have no material impact on its business.
The move comes just months after DP World signed a Technical Assistance Contract signed with the Indonesian government and state-owned port operator Pelindo I. Indonesia has long been seen as presenting great opportunities for international terminal operators, however, bureaucratic issues have proved problematic for investors.
DP World has a 20-year contract for TPS in Surabaya which was originally signed by P&O Ports prior to its acquisition by the Dubai-based terminal operator.
Source: SMNPrevious Next