DUBAI: Dubai announced the merger of its domestic and international port operations to form DP World as one of the largest port operators in the world and unveiled plans for new investments. "The merger, which came as a result of a boost in business, makes DP World one of the largest and most important port operators in the world," the chairman of the new group, Sultan Ahmad bin Sulayem, told a news conference.
DP World replaces Dubai Ports Authority and Dubai Ports International. It will operate two large local ports in Dubai and 16 partly or fully owned ports worldwide, CEO Mohammad Sharaf said.
DPA and DPI have been operating separately but under the same management.
DP World operates ports in the Middle East, Asia, Europe, Australia and Latin America.
Bin Sulayem said the step was taken to promote expansion of operations, forecasting that the biggest growth will be in China and India, where DP World runs a total of five ports.
Sharaf said DP World has earmarked $550 million over the next three years for direct investments, and that negotiations were under way with a number of ports around the world. He declined to provide details.
Bin Sulayem also announced the merger of Jebel Ali Free Zone Authority (JAFZA) and its international arm, JAFZA International, with the view of expanding operations.
DP World is projected to handle 12.5 million 20-foot equivalent units (TEUs) this year, more than double the 5.15 million TEUs handled by DPA in 2003.
In 2002, DPA launched a $1.1 billion expansion plan to boost capacity more than five times by 2020 to 21.8 million TEUs, when Dubai's Jebel Ali port will boast 82 berths, 125 quayside cranes and double the shoreline to 30 kilometers following land reclamation.
DP World is ranked as the 10th largest container operator in the world.
Jebel Ali, 25 kilometers south of the Gulf tourist and trading hub of Dubai, is the largest duty free port in the Middle East.
Dubai, part of the seven-emirate federation of the U.A.E., is strategically located at the Gulf's entry and acts as a transshipment hub for many goods from Asia which are then loaded onto planes bound for other parts of the Middle East and Europe.
Commenting on the restructuring, Sulayem, said: "The tremendous success and growth of our port business in recent years has led us to make significant changes to the organization of the whole Dubai Ports group. DP World combines the strengths of both DPA and DPI legacy organizations to create a very powerful global player in the ports operator industry. In addition, the creation of a new regulator and a new combined free zone operator puts in place a more effective and focused overall organization."
Jamal Majid Bin Thaniah, vice chairman of Board of Ports and Free Zones, and CEO of the Ports and Free Zone Authority said: "We are committed to implementing the highest levels of corporate governance and accountability within our new structure. The creation of the new Board of Ports and Free Zones in a supervisory and advisory role to both DP World and JAFZA and Business Parks, and the delegation of regulatory and administrative tasks to the Dubai Ports and Jebel Ali Free Zone Authority is testament to that commitment. In addition, the separation of powers allows for better focus and a clearer presence abroad." - With agencies