DUBAI: Dubai has said it is seeking international arbitration against Djibouti after the Horn of Africa nation terminated its concession at a key port that is the main transit route to landlocked Ethiopia.
The emirate said the Djiboutian government’s termination Thursday of the 50-year concession it granted to Dubai-owned DP World to operate the Doraleh container terminal in 2006 was “illegal.”
Announcing its decision on Thursday, Djibouti’s transport ministry said that it was merely implementing a law adopted in November last year that “sets a legal framework allowing for the renegotiation, if necessary, of contracts already concluded dealing with the management or exploitation of strategic infrastructure.”
“In the current case, the contract of concession for Doraleh container terminal contains elements that are in flagrant contravention of state sovereignty and the higher interests of the nation,” it said.
But Dubai countered that the Djiboutian legislation flew in the face of international law, as repeatedly upheld by arbitration tribunals.
“The illegal seizure of the terminal is the culmination (of) the government’s campaign to force the DP World to renegotiate the terms of the concession,” the government said late Thursday.
“Those terms were found to be ‘fair and reasonable’ by a London Court of International Arbitration tribunal,” it added.
“DP World has commenced arbitration proceedings before the London Court of International Arbitration to protect their rights, or to secure damages and compensation for their breach or expropriation.”
The Dubai government said it found Djibouti’s conduct to be “particularly oppressive and cynical” as two separate tribunals had recently dismissed its allegations of corruption in the awarding of the concession.
The tiny nation of Djibouti has become a major strategic player because of its position on the Bab Al-Mandab strait, the key shipping lane to Europe from the Gulf and Asia beyond.
The United States, France, Italy, Spain, Saudi Arabia, Japan and China all have military bases in the country.
China’s base is immediately adjacent to the Doraleh terminal.
The port is also the terminus for a Chinese-built railway between Djibouti and the Ethiopian capital Addis Ababa which opened in 2016.
More than 90 percent of the trade of Africa’s second most populous nation passes through Djibouti.
DP World has secured a string of port concessions in Africa, including one for Berbera in breakaway Somaliland up the Red Sea coast from the Bab Al-Mandab.
Dubai accuses Djibouti of illegally seizing key Africa port
Dubai accuses Djibouti of illegally seizing key Africa port
Saudi Arabia’s construction costs see 1% annual rise in November: GASTAT
RIYADH: Saudi Arabia’s construction costs rose at a steady pace in November, signaling resilience in the sector as the Kingdom continues to manage rising labor and energy expenses.
The Construction Cost Index climbed to 101.75 points in November, up 1 percent from a year earlier and broadly unchanged from October, according to data from the General Authority for Statistics.
The steady momentum in Saudi Arabia’s construction sector aligns with a broader trend across the Gulf Cooperation Council, as regional economies push to diversify away from hydrocarbons.
In July, real estate consultancy Knight Frank said Saudi Arabia’s construction output value is expected to reach $191 billion by 2029, representing a 29.05 percent increase from 2024, driven by residential development, ongoing giga-projects and rising demand for office space.
In its latest report, GASTAT stated: “The CCI recorded a 1 percent increase in November 2025, maintaining the same growth rate observed in October 2025. This increase is mainly attributed to a 1 percent rise in construction costs for the residential sector and a 1 percent rise in construction costs for the non-residential sector.”
In the residential sector, labor costs rose 1.5 percent year on year in November, while equipment and machinery rental costs increased 1.3 percent over the same period.
Energy prices recorded a sharp increase of 9.9 percent compared with November 2024.
Basic material costs edged up 0.2 percent, driven by a 1.4 percent rise in cement and concrete prices and a 1.1 percent increase in raw material costs.
In the non-residential sector, the Construction Cost Index increased 1 percent year on year in November, mainly due to a 1.2 percent rise in equipment and machinery rental costs.
Labor costs increased 1.1 percent, while energy prices continued their upward trend, rising 9.9 percent over the year.
Basic material costs rose 0.3 percent, reflecting a 2.5 percent increase in wood and carpentry prices and a 1.4 percent rise in raw material costs.
The Construction Cost Index tracks changes in construction input costs across 51 items, with prices collected monthly from 13 regions through field surveys of contractors, engineering offices and construction material suppliers. The base year is 2023, and the index is published monthly.
