PSA gets govt nod to sell stake in Chennai port2 min read . Updated: 10 Jun 2012, 11:01 PM IST
PSA gets govt nod to sell stake in Chennai port
Bangalore: PSA International Pte Ltd, the world’s second biggest container port operator, has won approval from the shipping ministry to sell up to 26% stake in a container terminal it runs at Chennai port to its local partner ABG Ports Pvt. Ltd.
PSA International, fully owned by Temasek Holdings Pte Ltd, the sovereign wealth fund of Singapore, had sought state-owned Chennai port’s permission to induct ABG into Chennai International Terminals Pvt. Ltd as a consortium member, one of the people, who is an official at the port, said on condition of anonymity.
PSA could not be immediately reached for comment.
The stake sale requires approval from the port and the shipping ministry, according to conditions specified project’s licence agreement.
Chennai International Terminals, the special purpose vehicle that runs the second container terminal at Chennai port, is 100% owned by PSA after the Singapore-based port operator parted ways with its erstwhile Indian partner Sical Logistics Ltd by buying its 27% stake in the terminal operating company in June 2010.
Union government-owned Chennai port is India’s second biggest container port after Jawaharlal Nehru port in Mumbai. PSA’s rival, DP World Pvt. Ltd, runs the other container- handling facility in Chennai port.
The valuation of Chennai International Terminals for the stake sale will be hit by the recent rate cut ordered by the port tariff regulator, a port industry executive said, asking not to be named.
The Tariff Authority for Major Ports (TAMP) had cut rates at the terminal by 12.23% after PSA asked for a 15% raise. The order was published in the gazette of India on 14 February and the new rates will remain valid till 31 December 2014.
TAMP is the tariff regulator for the 12 ports including Chennai that are controlled by the union government.
PSA has invested around ₹ 600 crore to build the facility, which it will operate for 30 years beginning September 2009. The terminal is designed to handle 1.5 million standard containers a year and currently loads more than 400,000 standard containers a year.
In 2009, Mumbai-listed ABG Infralogistics Ltd sold a 11.8% stake in the firm to PSA. ABG Infralogistics is the holding company for ABG Ports. The Singapore firm also invested about ₹ 350 crore for buying a 49% stake each in ABG Kandla Container Terminal Ltd and ABG Kolkata Container Terminal Pvt. Ltd, the entities floated by ABG Ports to run the two container handling facilities at union government-owned Kandla and Kolkata ports, respectively.
PSA runs another container terminal at V.O. Chidambaranar port, also controlled by the union government, at Tuticorin in Tamil Nadu.
In September 2011, a consortium of PSA and ABG had won a project to build a new ₹ 6,700 crore, 4.8 million standard container capacity a year terminal at Union government-controlled Jawaharlal Nehru port.