Companies line up to bid for Ennore cargo handling facility

Companies line up to bid for Ennore cargo handling facility
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First Published: Mon, Apr 14 2008. 11 51 PM IST
Updated: Mon, Apr 14 2008. 11 51 PM IST
Bangalore: Attracted by the huge opportunity for shipping cargoes in steel containers, more and more global and local firms are queuing up to bid for rights to set up and operate a new container cargo handling facility at the Union government-owned Ennore Port in Tamil Nadu, on the country’s eastern coast, as economic growth stokes trade in the world’s second fastest growing major economy.
Container terminal operator APM Terminals Management BV, Mitsubishi Group’s shipping company Nippon Yusen Kabushiki Kaisha, or NYK Line, Chennai-based logistics firm Sical Logistics Ltd, state-owned firms Shipping Corp. of India Ltd, or SCI, Container Corp. of India Ltd and Central Warehousing Corp. Ltd, or CWCL, have independently confirmed their decision to bid for the Rs1,300 crore (around $325 million) project.
APM Terminals is the container port operating unit of Danish shipping and oil giant AP Moller-Maersk Group and NYK Line is Japan’s biggest shipping firm by fleet size and revenues.
Container cargo at India’s Union government-owned 12 major ports grew by 19% in the 12 months to March 2008. Still, the container penetration (moving bulk cargo in containers) is low in India compared with global standards.
Containerized cargo represents only about 30% by value and 55% by volume of India’s external trade. The world average is between 75% and 80% by volumes. “This itself shows the huge growth potential for container traffic in India,” said S. Hajara, chairman and managing director of SCI, which is the country’s biggest shipping firm by fleet size and revenues. Hajara said SCI would bid for the project.
India’s container traffic is estimated to rise to 21 million twenty-foot equivalent units, or TEUs, by 2016 from about 7.5 million TEUs now. A TEU, the standard size of a container, is a common measure of capacity in the container business.
New capacities, such as the ones planned at Ennore, are being created to cater to the projected demand in container traffic at Indian ports.
APM Terminals, the world’s third-biggest container port operator, will bid for the 30-year contract, said a company executive who did not want to be named. The Copenhagen-based firm, which runs a facility at Jawaharlal Nehru Port in Navi Mumbai and Pipavav Port in Gujarat on India’s western coast is now looking to develop and run a new facility on India’s eastern coast.
Jawaharlal Nehru Port is India’s biggest container port, accounting for more than 60% of India’s container cargo traffic of about 7.5 million TEUs passing through its ports in the 12 months to March 2008. Maersk Line, the world’s biggest container shipping firm, and a part of the AP Moller-Maersk Group, ships more than 50% of these containers.
NYK Line plans to bid for the 1.5 million TEUs a year facility in the eastern coast port. It will bid for the project along with three other shipping firms, said a person familiar with the plan who did not want to be identified. He also declined to reveal the names of the consortium partners.
NYK Line, which operates 26 terminals across Asia, North America and Europe, controls about 50,000 TEUs a year in southern India. Together with its partners, the consortium controls about 200,000 TEUs a year in this region. “This is a sizeable quantum which will only grow,” the person said.
Sical Logistics will also bid, said its managing director and group chief executive officer Sudhir S. Rangnekar.
State-owned CWCL is bidding for the project along with Hind Terminals Pvt. Ltd, the Indian unit of Dubai-based shipping and logistics firm Sharaf Group, a company executive said. Both CWCL and Hind Terminals have independent licences to run container trains.
These entities are expected to give a tough fight to PSA International Pte. Ltd and DP World Ltd, two of the world’s top container port operators, who have earlier announced their intention to bid.
PSA is bidding for the project along with ABG Infralogistics Ltd in which it holds a 11.8% stake. PSA also had recently bought stakes in container terminals run by ABG at government-owned Kandla and Kolkata ports in Gujarat and West Bengal, respectively.
The bidder willing to share the highest proportion of its annual operating gross revenues with the government port will get the right to run the new terminal.
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First Published: Mon, Apr 14 2008. 11 51 PM IST