Dubai: DP World Limited will not renew its operating contract for PT Terminal Petikemas Surabaya (TPS) in Indonesia when it ends in 2019, the company announced on Thursday.
DP World’s Chairman and CEO, Sultan Ahmad Bin Sulayem, explained that he was disappointed with the Indonesian authorities failure to meet his company’s threshold for continued investment, and was thus cancelling the contract.
DP World is a 49 per cent shareholder in TPS, which represents a gross capacity of 2.1 million TEUs (twenty-foot containers) out of a total 85 million TEUs for the group.
A statement issued on Sunday noted that there would be no material financial impact on DP World as a consequence of this action.
Sultan Ahmad Bin Sulayem, DP World Group Chairman and CEO, said in a statement: “DP World, alongside other global terminal operators, has built world class port infrastructure in Indonesia that serves the needs of shipping lines, manufacturers, traders and consumers in the region.”
Bin Sulayem added that it was “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. 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.”
