United Arab Emirates-based port operator DP World has revealed its decision not to renew its operating contract for Indonesia's PT Terminal Petikemas Surabaya (TPS) facility after the expiration of the current deal in 2019.
The decision has been fuelled by discrepancies stirred between DP World and the Government of Indonesia regarding the new terms for renewing the agreement.
According to DP World, the new terms offered by the Indonesian Government do not meet its requirements for continued investment at the port.
DP World currently owns 49% share in the TPS facility, which comprises 2.1 million twenty-foot container units (TEUs) of the company’s total 85 million TEU capacity.
DP World group chairman and CEO Ahmed Sulayem 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.
"The transfer of operations will be in accordance to the terms and conditions of the contract.”
DP World further noted that the decision is not expected to impact its financial position.
The company has been providing the Surabaya port with its productivity enhancing systems for the last two decades, as well as training, development programmes and various other initiatives.