The Hindu Business Line : APM Terminals set to take control of Pipavav Port

CLOSE on the heels of its successful bid to develop and operate a new container terminal at Jawaharlal Nehru Port, the Denmark-based AP Moller-Maersk A/S Group is close to acquiring a controlling stake in Gujarat Pipavav Port Ltd (GPPL), the company set up to operate and manage Pipavav Port in Gujarat.

APM Terminals, part of the AP Moller-Maersk Group, will take management control of Pipavav Port by increasing its stake from the existing 12.5 per cent to 26 per cent through a combination of primary and secondary share acquisitions, a top GPPL official told Business Line. The Foreign Investment Promotion Board had recently cleared the GPPL proposal to increase the foreign direct investment limit in the port operating company from 49 per cent to 100 per cent as part of a Rs 1,100-crore restructuring plan.

"APM Terminals will lead the project immediately after the restructuring plan is finalised and will look after the operations of the port," the official said.

The Danish shipping and port major will buy out the stake held by Sea King Infrastructure Ltd (SKIL), which is currently the majority shareholder in GPPL with 37 per cent.

Following the restructuring, Sea King will be the reduced to the status of a minority stakeholder in GPPL, the first private port in the country.

Sea King, APM Terminals and other shareholders are close to wrapping up talks to finalise the price at which Sea King will sell its holding in the company. "This will be finalised by the end of April after which a memorandum of understanding (MoU) will be signed by all the partners," the official stated.

Apart from Sea King and APM terminals, the other shareholders in GPPL are PSA Corporation Ltd (22.5 per cent), IDBI (10 per cent), CDC Plc, AMP Australia, New York Life Insurance and Unit Trust of India (UTI).

The restructuring plans of GPPL also comprise fresh equity infusion, which will be subscribed to by the existing and new investors.

The funds brought in by APM Terminals, existing shareholders and new investors will be utilised to finance the expansion plans including the construction of a modern container terminal at the port with a capacity to handle in excess of 1.3 million twenty-foot equivalent units (TEUs) annually.

Currently, Pipavav does not have a dedicated terminal for handling containers, but the port has been handling small volumes of box traffic of 20,000-30,000 TEUs annually.

The planned container terminal will incorporate the existing three dry cargo berths, which will be upgraded by increasing overall length and width. In Phase 1, expected to be ready by 2005, about 440 metres of quay length would be developed to handle containers.

Besides, four super post Panamax Quay Cranes would be deployed at the berths supported by 10 Rubber Tyred Gantry Cranes (RTGs) at the container yards.

The containers will be stored in a 30-hectare yard close to the berth, which will be used exclusively for stacking and inter-change of containers.

The port also has plans to develop a Container Freight Station (CFS) on 18 hectares with four large warehouses to store the cargo. The draft in the channel and alongside the berth will be increased from the existing 10.5 metres to handle new generation super post Panamax container vessels.

A rail container terminal will be built adjacent to the container yard.