News / Land grab from DP World terminal costs Belgian port €41.3m in fines

Credit DP World

The state-run port of Antwerp-Bruges has been ordered to pay €41.3m ($44.67m) in fines after repossessing 40ha of DP World’s Deurganckdok concession and giving it to PSA.

An arbitration tribunal by the International Centre for Settlement Investment Disputes (ICSID) on 15 February ruled in favour of DP World.

In 2005, Port of Antwerp granted 42-year concessions to both DP World, on the east side of Deurganckdok, and a consortium of shipping line MSC and Singapore’s PSA on the west side. These agreements were accompanied by minimum throughput requirements, requiring terminal operators to pay compensation to the port authority if specific tonnage levels were not met.

In 2009, following the global financial crisis and a drop in volumes, Antwerp revised downwards the minimum tonnage requirements, so that the two operators paid only 80% of the compensation due. This briefly resulted in an EU competitiveness probe, beginning in 2015, which ended in 2018 with the port being exonerated.

In 2014, Antwerp Port Authority “expropriated” an unused area of the DP World concession and transferred it to PSA, defending its decision on the grounds that it was in the public interest.

The port’s website said: “The port authority is convinced that the 2014 repossession decision safeguarded the port’s international traffic and promoted (in)direct employment in and around the port area.”

And it added: “The port authority emphasises the optimum collaboration and relations with DP World, one of the most important terminal operators at the port of Antwerp.”

However, the decision has turned out to be financially disastrous for the port, which has been ordered to pay hefty compensation to DP World, which brought the case to ICSID in mid-2017. Indications are that the $44.67m is a preliminary sum, and could substantially increase once costs and interest are added on.