The Hindu Business Line : Dubai Ports nets Indian box terminals thru P&O buy

A MAJORITY of container shipping in India is set to come under the control of DP World, the global ports business of Ports, Customs and Free Zone Corporation, Dubai, following its acquisition of Peninsular & Oriental Steam Navigation Co (P&O), UK.

DP World and P&O issued a joint statement of the deal, which would create one of the world's largest shipping companies controlling container terminals in UK, China and India. Container shipping in India is thus set to witness a sea-change following this £3.33 billion (Rs 26,278 crore) deal.

Through this deal the Gulf-based company will have in its kitty India's three major container terminals: Nhava Sheva, Mumbai; Chennai Container Terminal, Chennai; and Mundra International Container Terminal, Gujarat; apart from a share in the Vishaka Container Terminal at Vishakapatnam.

Also, with the development of Vallarpadam Container Terminal by Dubai Ports in Kochi, a majority of the Indian container shipping is expected to be in the hands of the Gulf-State backed company, according to an industry source.

"Dubai Ports is going to rule the India container industry," the source said.

Mr Ennarasu Karunesan, Chief Executive Officer, Chennai Container Terminal said except for new ownership, there would be not any change in the container handling in Chennai.

"We need to wait for a while to know what is going to be the strategy of Dubai Ports," he told Business Line.

Against the total Indian container trade volumes of about 4.3 million TEUs (twenty foot equivalent units) in 2004 P&O Ports handled about 2 million TEUs. "This shows P&O's strong presence, which would be transferred to Dubai Ports," said a source.

According to India Brand Equity Foundation (IBEF), an initiative of the Union Ministry of Commerce & Industry and Confederation of Indian Industry, with 27 container terminals, logistics operations in over 100 ports and a presence in 18 countries, P&O entered India in 1996 with a seed capital of $250 million and has invested close to $800 million.

P&O Ports operates the Chennai Container Terminal Ltd (CCTL).

The Nhava Sheva International Container Terminal in Mumbai was the first port facility awarded to P&O by the Indian Government and was commissioned in early 1999. In 2004 it handled 12,14,473 TEUs, it said.

P&O Ports purchased the Mundra International Container Terminal container terminal at Mundra, Gujarat, from the Adani Group in May 2003. The terminal handled above 3,60,000 TEUs since commencing operations in July 2003, the IBEF said.

The three P&O terminals which together handle more than 2.2 million TEUs per annum, employ 1,300 people in India.

According to an official, there will not be any retrenchment of employees as the terminals are not overstaffed.

In fact, the business is growing and the new owner may have to recruit more people.

Last fiscal, all Indian ports together handled 4.23 million TEUs. This year, the traffic may exceed 4.5 million TEUs.

With Dubai emerging as the largest container terminal operator in India accoutring for close to 50 per cent of the country's traffic, the nature of competition in the port sector may under go a change, said an official with an Indian port.

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