China's second-largest shipping carrier yesterday announced plans to invest in Shanghai's deepwater port project in partnership with a major Hong Kong port operator.
The move makes the two partners, China Shipping (Group) Co and Hong Kong-based Modern Terminals Limited, the first companies to publicly announce plans to invest in the Yangshan Deepwater Port, which carries Shanghai's hopes of emerging as the shipping hub of southeast Asia.
More than 20 multinational companies in the shipping and port industry, however, have submitted detailed investment plans, said officials with the port's headquarters.
Li kelin, president of China Shipping, said they plan to get operation rights for between four and six berths in the multi-billion Yangshan ports. Each berth will cost an estimated 1.5 billion yuan (US$180.72 million).
"A major part of China Shipping's container flow is in and out of Shanghai and the volume handled at local ports is always rising by leaps and bounds," Li said. "We're in strong support of the deep-water port and we hope to get a foot in the ports' operation."
Both parties have set up a joint workforce to explore business opportunities offered by the Yangshan ports. When it comes to the investment stage, they'll set up a 50-50 joint venture, Li noted.
The local government, however, isn't expected to begin choosing partners for the project until the end of this year.
The two Yangshan islands, located in the East China Sea near Shanghai, will be built into a port with a designed handling capacity of more than 20 million TEUs (twenty-foot equivalent units) and 52 berths.
China shipping, whose fleet of 100-plus ships has a total capacity of 190,000 TEUs, handles the most containers among all its counterparts in Shanghai. It expects to carry more than 1.3 million TEUs through local ports this year.
Modern terminals, the oldest container port operator in Hong Kong and currently the major rival of Li Ka-shing's Hutchison Port Holdings, recently accelerated in expanding into China's central and northern cities as it has already engaged in many southern ports.
Erik bogh Christensen, managing director of Modern Terminals, said the company has already reached an agreement with government officials in neighboring Suzhou city to build a feeder port.
(Shanghai Daily August 15, 2003)
