LONDON: DP World has struck a major new logistics deal in Mali as it seeks to boost its presence in West Africa and rebound from a series of setbacks in the east of the continent.
The Dubai-based ports operator has signed a 20-year concession with an automatic 20-year extension with the Republic of Mali to build and operate a 1,000-hectare logistics hub outside of the capital, Bamako.
The multimodal logistics platform, Mali Logistics Hub (MLH), will have inland container depots container freight stations, the Dubai-based port operator said in a statement on Wednesday.
“The Malian market is expected to grow over the next two decades and is driven by a robust economic and population growth,” said DP World Chairman and CEO Sultan Ahmed Bin Sulayem.
“DP World’s investment will significantly cut processing times for goods and thus facilitate trade. We are committed to enabling trade in the region and helping local businesses and people prosper, and look forward to working together.”
The latest investment from DP World in West Africa comes as it emerges from a torrid period on the other side of the continent in the Horn of Africa where it found itself consumed by a wider political rift between the UAE and Djibouti.
That was triggered when Djibouti terminated a contract that allowed DP World to operate the Doraleh container terminal on its east coast. A few days later Somalia also banned the UAE from investing in any part of the country.
Such political considerations may not be as much of a concern for DP World as it develops its footprint in Mali — which nonetheless is not without its own security risks.
On Wednesday armed protesters from Mali’s Arab community fired shots into the air, burned tires and torched vehicles in Timbuktu, bringing the desert city to a standstill days before an election seen as a test of stability across the country, Reuters reported.
DP World’s Mali Logistics Hub will be located on the main road corridor from Dakar, Senegal to Bamako and close to the Dakar-Bamako rail line.
It will be capable of handling 300,000 TEU (twentyfoot equivalent unit), 4 million tons of bulk and general cargo.
The first phase of the project, with an estimated initial investment of $50 million, will include an inland container depot and container freight station facility.
Construction is expected to start in 2019 and is to take approximately 18 months to complete.
The ports operator said that the Mali logistics hub will significantly reduce processing times for products entering the Malian market as part of efforts to reduce obstacles to trade and economic development.
Africa is a key market for DP World as the continent’s under-served logistics sector attracts increasing capital from investors betting on the continent’s growth potential and rising income levels.