The Shenzhen local government announced yesterday it would set up a partnership with Modern Terminals, a Hong Kong port operator, to develop a new container terminal in western Shenzhen in an attempt to quench the rising demands from South China's exporters.

The two parties will invest about 7.1 billion yuan (US$857.5 million) in the first phase of the project, Dachan Bay Container Terminals (DCB), through a newly-founded joint venture in which Modern Terminals will take a controlling 65 per cent stakes.

The government-backed Shenzhen Dachan Bay Port Investment & Development Co holds the remaining 35 per cent, mainly by providing land and the supporting facilities.

With an area of 1.12 million square metres and a quay length of 1,830 metres, the first phase of DCB will consists of five berths, each capable of serving the biggest container vessels in the world, said Shi Yousheng, deputy manager of the joint venture's Shenzhen shareholder.

"The first two berths will be put into operation by the end of 2007 and the construction of the other three will be completed by the end of 2008," Shi said in a speech during the signing ceremony.

Upon completion of the first phase, the terminal will be able to handle at least 2.5 million TEUs, or about one fifth of the handling capacity of Shenzhen ports last year.

The terminal is being built on reclaimed land, work on which began last year. This has been going smoothly, Shi said.

"The land reclamation could be completed by August 31, as well as the supporting faculties. We plan to start the construction of the port infrastructure at the end of this year," he said.

Peter Woo, chairman of The Wharf (Holdings), controlling shareholder of Modern Terminals, said the future for DCB is bright given the growing exports from the region.

The local government had planned to keep the area, which is located on the Pearl River Estuary and has deep-water access, for long-term development of the city's port industry.

However, booming trade in South China, which has kept the city's existing port facilities working to capacity, finally prompted the government to accelerate the development of DCB.

It signed letter of intent with Modern Terminals in early 2002. The project was approved by the central government this March.

"The co-operation with Modern Terminals will introduce capital, technology, management, professionals and information. The joint effort between Shenzhen and Hong Kong will eventually create a world leading shipping centre in the region," said Mayor Xu Zongheng.

According to plans, DCB will be constructed in four phases with a total of 20 berths.

The city's port industry will then comprise the Yantian port in the east, Chiwan and Shekou terminals in the west and the neighbouring Dachan Bay port.

Currently, the Yantian, Chiwan and Shekou terminals handle about 80 per cent of the total containers shipped out of the city.

Last year, the city moved cargo of 13.66 million TEUs, up by 28.2 per cent from a year ago. It ranks as the fourth largest container terminal in the world.

The momentum continued in the first half of this year, with Shenzhen ports handling a total of 7.4 million TEUs, up by 23.4 per cent from the corresponding period of last year.

(China Daily July 20, 2005)