DP World Limited announced that the company has reached a decision not to renew its operating contract for PT Terminal Petikemas Surabaya, TPS, in Indonesia at the end of the agreement in 2019.
DP World is a 49 percent shareholder in TPS, which represents a gross capacity of 2.1 million TEUs, twenty-foot containers, out of 85 million TEUs for the Group. There will be no material financial impact on the Group as a consequence of this action.
In a press statement, Sultan Ahmed bin Sulayem, DP World Group Chairman and CEO, said, "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. Over the last 20 years, Surabaya has benefitted from DP World’s state-of-the-art, productivity-enhancing systems, training and development programmes, as well as the company’s security, safety and environmental best practices, and we are proud of our success there. We have invested significantly in the terminal infrastructure, which has created jobs and contributed to the growth of both the port and the region."
"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 explained, adding, "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."
"When investing in trade infrastructure and services, our goal is to serve our global customers while making a positive economic impact in the countries in which we work and delivering returns to our shareholders. We remain committed to investing in Asia and all geographies that have an appetite for foreign direct investment," Bin Sulayem concluded.