DP World has decided not to renew its operating contract for PT Terminal Petikemas Surabaya (TPS) in Indonesia at the end of the agreement in 2019, citing unattractive renewal terms on offer.
The Dubai-based company is a 49% shareholder in TPS, which represents a gross capacity of 2.1m teu out of 85m teu for the group.
The company does not expect there to be any material financial impact on the group as a consequence of this action.
Sultan Ahmed Bin Sulayem, DP World Group Chairman and CEO, said: “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.”
He further claimed that Surabaya has benefited from DP World’s “productivity-enhancing systems, training and development programmes, as well as the company’s security, safety and environmental best practices”, over the past 20 years.
TPS handled 910,352 teu between January and August of this year, setting it on course to achieve its target of 1.4m teu over the whole year.