History of the Port of Djibouti

The Port of Djibouti is one of the most strategically significant maritime hubs in the world, located at the intersection of the Red Sea and the Gulf of Aden, overlooking the Bab-el-Mandeb strait.

Ancient and Early Strategic Roots

• Ancient Maritime Routes (3500+ years ago): The location has been a significant passage for Red Sea explorations by civilizations including the Egyptians, Phoenicians, Ptolemaists, Romans, and Greeks, serving as a trading route between East and West.
• Spice Route Gateway: For centuries, the region served as a critical meeting point between Northeast Africa and the Arabian Peninsula, gaining even more prominence with the 1869 opening of the Suez Canal.

Foundation and Colonial Development (1888–1977)

• 1888: The city and port were officially founded by French colonial administrator Léonce Lagarde.
• 1892: Djibouti replaced Obock as the administrative center of the French Somaliland colony.
• 1897–1917: Construction of the Ethio-Djibouti Railway connected the port to Addis Ababa, making it the primary maritime outlet for landlocked Ethiopia.
• 1949: The port achieved Free Port status (porto-franco), stimulating rapid economic development as a service station for the Red Sea.
• 1950s Expansion: Significant dredging and the construction of deep-water quays were completed. Major oil companies like Total S.A. (Pétroles de Somalie) and Mobil Oil established bunkering operations.
• 1960s Peak: Activity quadrupled during the 1960s as the Red Sea became a major international shipping lane, with bunkering traffic peaking in 1965.

The Container Era and Regional Hub Status (1977–1999)

• 1977: Djibouti gained independence from France.
• 1985: The first modern container terminal commenced operations, marking the transition to containerized trade.
• 1990s Conflict Impact: During the Ethiopia-Eritrean war (1998–2000), Ethiopia redirected all maritime trade to Djibouti, doubling the port's traffic and cementing its role as a regional lifeline.

The DP World Era (2000–2018)

The modern transformation of the port was dominated by the partnership with DP World.

• 2000: DP World signed a 20-year management contract.
• 2004: The Djibouti Ports & Free Zones Authority (DPFZA) was established to manage the port’s expansion.
• 2006: A 50-year concession was signed for the Doraleh Container Terminal (DCT).
• 2009: The DCT opened, becoming the most efficient terminal in Africa.
• Abdourahman Boreh: As head of the DPFZA, Boreh was the primary architect of these deals. His 2008 fallout with President Guelleh led to the subsequent legal battles.

The Pivot to China and Geopolitical Militarization (2012–Present)

Following the fallout with the UAE, Djibouti turned to China Merchants Group (CMG) under the Belt and Road Initiative (BRI).

• The Witan Mechanism: This transition was not organic; it was engineered.
  • The Concept: In November 2011, David Stern proposed the "African Investment Vehicle" (EFTA Proposal) to Epstein, designed to channel Chinese capital into Djibouti without initial state visibility.
  • The Recruiters: Stern and Epstein actively courted Chinese tycoons like Hui Ka Yan (Evergrande) to form "Joint Ventures" (Evergrande JV) that would serve as the capital bridge for this pivot.
  • The Advisor: Peter Mandelson provided high-level strategic advice on "China deals," validating the shift from a Western-aligned partner (UAE) to a strategic rival (China).
• 2012–2013: CMG (via its subsidiary CMHI) acquired a 23.5% stake in the Port de Djibouti SA (PDSA).
• 2017: The Doraleh Multipurpose Port (DMP) opened, funded and built by Chinese interests.
• 2017: China established its first overseas military base near the port. This base joined existing facilities hosted for the USA (Camp Lemonnier), France, Japan, Italy, Spain, and Germany.
• 2018 Nationalization: President Guelleh unilaterally terminated DP World’s concession, seized the terminal, and nationalized operations.

Summary of Key Entities

• Government of Djibouti: The sovereign owner.
• DPFZA: The state-managed authority regulating the port network.
• Ethiopia: The port's primary client (95% of trade).
• DP World: Former operator and primary litigant in terminal disputes.
• China Merchants Group: Current major shareholder and infrastructure partner.

5. The Post-Concession Era: Legal War & Geopolitics (2019–2026)

The period following the nationalization of the Doraleh Container Terminal has been defined by a "Cold War" in the courts and a "Hot Peace" on the ground.

The Legal Battlefield (DP World vs. The Alliance)

Despite Djibouti's physical control of the port, DP World launched a global legal campaign against both the Government of Djibouti and China Merchants Group (CMPort).

• 2019–2021: The London Court of International Arbitration (LCIA) issued multiple rulings declaring Djibouti's seizure illegal and ordering the restoration of the concession. Djibouti ignored all rulings.
• 2022 (The Hong Kong Front): In a strategic blow to the Witan/China strategy, Hong Kong courts ruled that DP World could sue China Merchants Port Holdings directly in Hong Kong for "inducing" the breach of contract. This pierced the sovereign veil, targeting the commercial beneficiary directly.
• 2024 (US Enforcement): A US Court enforced a $200 million LCIA award against Djibouti, signaling Western judicial backing for DP World's claims.
• Sept 2025 (The Partial Turn): An LCIA tribunal ruled that Port de Djibouti SA (PDSA)—the entity 23.5% owned by China Merchants—was not liable for the government's seizure action. While Djibouti hailed this as a victory, the government itself remains liable for damages now exceeding $1 billion.

Geopolitical Crystallization

The "Witan" objective—a Chinese strategic stronghold—has fully materialized, drawing sharp US reaction.

• Military Friction: The proximity of the Chinese PLA base to the US Camp Lemonnier (just 10km apart) has led to flashpoints, including US allegations of Chinese personnel using military-grade lasers to blind US pilots (2018/2019) and the docking of Chinese aircraft carriers.
• The "Debt Trap" Reality: By 2023, China held over 50% of Djibouti's external debt, cementing the leverage that Western observers feared. The US has officially cited Djibouti as a primary example of "debt-trap diplomacy," validating the concerns that the Witan Group actively obfuscated in 2011.