Dubai-based ports giant DP World has decided not to renew its operating contract at PT Terminal Petikemas Surabaya (TPS) in Indonesia when the current agreement ends in 2019.
DP World is a 49% shareholder in TPS, with the remaining 51% owned by Indonesia Port Corporation, having picked up the stake when it acquired P&O in 2006.
According to Sultan Ahmed Bin Sulayem, chairman and CEO of DP World Group, the group has invested significantly on the port infrastructure in Indonesia, and the pullout decision is a disappointing result.
“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. 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,” said Bin Sulayem.
“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,” he added.
DP World said there will be no material financial impact on the group as a consequence of the decision.