Bangalore: Singapore-based PSA International Pte Ltd, the world’s second biggest container port operator, has persuaded three container carriers being serviced by rival DP World Pvt. Ltd to use its new terminal, the second at Union government-owned Chennai port in Tamil Nadu.
A container shipping service run by a consortium of Pacific International Lines Pte Ltd, K Line America Inc. and sate-run Shipping Corp. of India Ltd (SCI) will start calling at the new terminal, Chennai International Terminals Pvt. Ltd, from 16 December, according to two persons familiar with the development. Chennai International Terminals is 73% held by PSA International, which in turn is fully owned by Temasek Holdings Pte Ltd, the investment arm of the Singapore government. The remaining stake is held by local firm Sical Logistics Ltd.
The three container carriers are currently using Chennai Container Terminal Pvt. Ltd, run by DP World, the world’s fourth biggest container port operator, majority owned by the Dubai government.
The three carriers operate a direct weekly service called Indfex 2, carrying cargo containers from the east coast of India to East Asia, South Asia and South-East Asia, mainly China and back.
“The consortium partners have given a termination notice to the DP World terminal to stop calling there after signing an agreement with the PSA terminal,” said an executive at SCI. “We were able to negotiate better rates with the new terminal.”
The executive declined to be named because he is not authorized to speak to the media and also because the decision to move to the new terminal for loading and unloading containers has not been made public yet.
Spokespersons at Pacific International Lines, K Line and SCI declined to comment. PSA also declined to comment.
“Since there are commercially sensitive discussions going on amongst the consortium members at this point in time, it is a bit premature for us to make any comment on the same,” said Rowena Ribeiro, general manager, marketing and communication, Indian subcontinent, at DP World.
The joint venture between PSA and Sical has invested around Rs600 crore to build the new facility, which it will operate for 30 years.
The PSA-Sical facility, with a capacity to handle 1.5 million standard containers a year, will be formally opened in December. The new facility has an on-dock rail link, allowing trains carrying containers to come directly into the terminal.
PSA is opening a new terminal when container business at ports in India, Asia’s third biggest economy, has witnessed a decline in the wake of the global recession.
For instance, Chennai port, India’s second biggest Union government-owned container port after Jawaharlal Nehru Port in Mumbai, handled 588,000 standard containers in the first six months of the current fiscal year, compared with 629,000 standard containers the previous year.
During the April-September period, the 12 ports together handled 3.32 million standard containers, 6.32% lower than the 3.55 million standard containers they handled the previous year.
After DP World, PSA is the biggest foreign investor in Indian container port terminal projects. The Singapore-based firm has a 57.5% stake in a container handling facility at the Tuticorin port, 49% in a container terminal at the Kolkata port and another 49% in a facility at the Kandla port.