DP World shuts Egyptian port again

DP World closed its Ain Al Sokhna port in Egypt for a third day yesterday as labour strikes over wages and profit sharing disrupted shipments.

DP World has remained committed to Sokhna, despite the protests. It said in October that it planned to raise the capacity of the port by nearly half by the end of last year to accommodate rising container volumes. Courtesy SokhnaShow less

DP World closed its Ain Al Sokhna port in Egypt for a third day yesterday as labour strikes disrupted shipments.

Workers are demanding hardship allowances, wage restructuring and a percentage of the company's profits, according to a report by Reuters, citing an official at the Red Sea Ports Authority.

The global ports operator said it hoped to reopen the port as soon as the protests eased.

"Our primary concern is the safety of our people," said a DP World spokesman yesterday. "While we do not anticipate much disruption to our business, we hope to resolve the situation as soon as possible and swiftly resume normal operations."

Positioned near the southern end of the Suez Canal, Sokhna is well located to serve the flow of trade between Europe, Africa and Asia. It is also 110 kilometres by road and rail from Cairo, the largest single market in the Arab world's most populous nation.

It is the second time in less than six months that DP World has closed the port because of unrest. In September, operations at the port were halted for five days when employees went on strike demanding better conditions. The shutdown reportedly cost DP World about US$5 million (Dh18.3m).

The latest disruption follows a wave of similar instability across the country as workers demand better treatment. The protests risk harming the recovery of Egypt's economy from a revolution that toppled Hosni Mubarak from the presidency in February last year, say economists.

"If instability across the country continues, then Egypt's competitiveness will be dented," said Jean-Michel Saliba, the Middle East and North Africa economist at Bank of America Merrill Lynch. "If the situation remains unstable, then the environment will not be conducive to investment."

DP World has remained committed to Sokhna, despite the protests. It said in October that it planned to raise the capacity of the port by nearly half by the end of last year to accommodate rising container volumes.

More than 900 workers were involved in the latest strike, according to local media reports. The strikers' demands included risk allowances comparable to those received by staff at other sea ports, Ahram Online reported.

Six port workers were also waging a hunger strike until their demands were met, it reported.

Sokhna is not the only port in DP World's portfolio to be disrupted by recent staff action. Last month the company said it would lock union workers out of its Melbourne container port in Australia in response to a planned 24-hour strike.

DP World is one of the more profitable units of Dubai World. This month, it reported it handled 10 per cent more containers last year than in 2010 as it weathered a stormy time in the global shipping industry. Trade was most brisk in the firm's ports in Africa. Despite last year's temporary shutdown in Sokhna, the firm still reported a 15 per cent rise in container traffic in its Egyptian operations last year.

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