DP World has revealed it will invest up to US$1 billion into a 13,000-TEU annual capacity terminal on the Indian west coast at Kochi to challenge Colombo's hold over India's trade with Europe and China."Presently, long-haul vessels are unable to stop in India, which forces importers and exporters to spend an extra $150 million a year ferrying goods to and from Colombo, Singapore or Dubai," said Anil Singh, DP World's man in India, told Bloomberg News.

"What we are trying to do is compete in the regional and international market," he said in Mumbai interview. "It will change the logistic pattern of the country."

DP World, controlled by state-owned holding company Dubai World, spent INR13 billion (US$288 million) on the first phase of the new Kochi facility on southern west coast to first handle one million TEU a year.

The rest of the money According to Mr Singh, the rest of the investment will be sunk into building the second phase that is expected to add a further three million TEU in box handling capacity within five years. Container Corp of India Ltd is among three other partners in the terminal venture.

The new terminal is scheduled to open in August when it will be able to accommodate the 13,000-TEU vessels commonly used on Asia-Europe routes.

DP World will pay its share of the investment using its own funds, with Mr Singh dismissing suggestions that Dubai World's massive debt will have an impact on expansion plans.

The Indian government is also dredging Kochi port and building rail links to help boost traffic, Mr Singh said. The government has also agreed to lower port fees that are said to be more than eight times higher than Colombo's for larger ships to attract more traffic.

The report added that Kochi aims to lure large container vessels from Colombo, which currently handles 40 per cent of India's transhipment trade, according to Mr Singh. Indian shippers use the Sri Lankan port because of lower costs, deepwater and looser regulations, said Bloomberg.

DP World handles almost half of India's eight million containers annually that pass through the nation's five ports, and the company intends to pursue further projects and expansion plans in the country, the report added.

Source: schednet