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DP World is set to finalize a JV with Malaysia’s Suria Capital this month for the development of the Sapangar port, The Edge Malaysia reports. The JV — dubbed DPW Sabah — will work to establish Sapangar Bay Container Port (SBCP) as a regional trade hub for the Brunei Darussalam-Indonesia-Malaysia-Philippines East Asean Growth Area (BIMP-EAGA).
About the JV: Indonesian port operator Suria Capital previously signed a conditional share subscription agreement with DP World to hand it a 51% stake in a JV. The remaining 49% would be given to Sabah Ports. The Sabah Ports Authority would then issue DP World Sabah the license to operate and manage the container port. DP World would co-manage SBSCP.
Where we’re at: Negotiations are still ongoing between DP World and the Sabah government on payment terms, including the split of proceeds from the port’s development, Managing Director of Suria Capital Datuk Ng Kiat Min told The Edge. The JV is also subject to a review of port tariffs, which the Edge says have not been changed for 35 years.
What’s next? Once terms are agreed, Suria Capital will enter discussions to extend the length of its concession agreement at the port for a further 30 years to 2064, the Edge reported previously.
A boon for DP World: The JV could potentially bring to DP world mns of RMs for DP World within the next 10 years. The partnership is set to boost cargo volumes, which are “easily worth RM 1 bn in value creation,” Min Ng said.
REFRESHER- DP World inked an agreement with Malaysia’s Sabah Ports to jointly manage SBSCP back in May. The agreement will see DP World support efforts to boost SBCP’s container handling capacity from 500k TEUs to 1.25 mn TEUs by 2025. The pair will also invest in improvement to SBCP’s cold chain storage and transport capabilities to increase the export of Sabah’s agricultural products to international markets opening growth pathways.
Background: The latest partnership builds upon a long-term collaboration agreement inked by DP World and Sabah Ports in 2019, where both parties agreed to co-develop solutions to boost SBCP’s competitiveness. Long term, the partnership looks to boost land and sea connectivity in Sabah, curb transit times and costs, and improve standards across Sabah’s supply chains.
