DP World challenges Colombo

- DP World Ltd. may invest up to US$1bn in the first Indian port able to handle the largest container ships as the company tries to challenge Colombo’s grip on India’s maritime trade with Europe and China according to a report in Turkish Maritime. “What we are trying to do is compete in the regional and international market,” said Anil Singh, DP World India’s CEO. “It will change the logistic pattern of the country.”

The new terminal in Kochi, south India, which is due to open in August, 2010 will be able to handle the 13,000 teu capacity vessels commonly used on Asia/Europe routes. Presently, these long-haul vessels are unable to stop in India, which forces importers and exporters to spend an extra US$150m a year ferrying goods to and from Colombo, Singapore or Dubai, Singh said.

DP World has already invested around Rupees 13bn (US$288m) on phase one of the new Kochi facility, which will have an initial capacity of one million teu a year. The remainder of the investment will cover phase two, which will add another 3m teu capacity within five years. Container Corp. of India Ltd. is among three other partners in the terminal venture.

According to the company, DP World will pay for its share of the investment using its own funds and its financial difficulties have had no impact on expansion plans. DP World, which is currently preparing to sell shares in London, has risen 12% this year in Dubai trading.

Kochi aims to lure large container vessels from Colombo, which presently handle as much as 40% of India’s transhipment trade, according to Singh. Indian shippers use the Sri Lankan port because of lower costs, deepwater facilities and looser regulations.

Source: China Daily