Singapore port operator hikes stake in Chennai facility

Singapore port operator hikes stake in Chennai facility

Bangalore: Singapore-based PSA International Pte Ltd, the world’s second biggest container port operator, has raised its stake in a new container handling terminal at Chennai port by 13% to 73%, after its local partner in the venture decided to settle for a 27% equity.

The new facility, with a capacity to handle 1.5 million standard containers a year, will start operations in May.

“As per the agreement with PSA, we had an option to go up to a maximum of 40%. But we decided to settle the stake at 27%," said Sudhir Rangnekar, managing director and group chief executive of Chennai-based Sical Logistics Ltd.

Rangnekar did not elaborate on the reason behind this decision nor did he give other details.

A formal announcement on the revised shareholding pattern of the Chennai facility will be made after the proposal is cleared by the Union government-owned Chennai port, India’s second biggest container port.

PSA’s rival DP World, the port operator owned by the Dubai government, already runs a facility at Chennai that handled 1.02 million standard containers in fiscal 2008.

PSA, fully owned by Temasek Holdings Pte Ltd, the investment arm of the Singapore government, has a 57.5% stake in a container handling facility at Tuticorin port, 49% in a container terminal at Kolkata port and another 49% in a facility at Kandla port.

Earlier this year, PSA also bought a 11.8% stake in Mumbai-based port logistics firm ABG Infralogistics Ltd.

The port operator recently pulled out of a deal to develop and operate a new container handling facility at Hazira port in Gujarat, citing stiff commercial terms.

Container cargo traffic at ports in India, Asia’s third largest, has been growing at a rate of at least 15% a year.

At this rate, India’s container traffic is estimated to reach 21 million standard containers a year by 2016 from around 7 million standard containers now, according to the Union shipping ministry.

PSA runs its flagship terminal at Singapore, the world’s biggest container port, which handled 27.1 million standard containers in 2007, accounting for one-fifth of the world’s total container traffic.

In 2007, PSA handled an additional 31.75 million containers from terminals outside Singapore.