DPW looks to China for terminal venture

Dubai Ports World (DPW), the world’s third largest port operator, yesterday deepened its involvement in China with a new venture that will build a container terminal at Tianjin at a cost of US$500 million.

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By  Andrew White Published  June 18, 2006

Dubai Ports World (DPW), the world’s third largest port operator, yesterday deepened its involvement in China with a new venture that will build a container terminal at Tianjin at a cost of US$500 million. The Dubai-based, government-owned company already operates container berths at six ports in China with a combined container throughput of around 11 million TEUs (20-foot equivalent units). It now has a 50% stake in the new project, to be developed by DPW Tianjin Holdings Limited, a joint venture between DPW and China’s Tianjin Port Group Company Limited (TPG). Currently, in a joint venture with TPG, the Dubai firm operates the existing Tianjin Orient Container Terminal. Jamal Majid Bin Thaniah, vice-chairman of DPW and group chief executive officer of Ports and Free Zone World, a new entity responsible for overseeing DPW and P&O’s operations, said China was a key strategic region because of the high container volume handled at its ports. “China today handles 90 million TEUs,” he said. “It has become the factory of the world and many foreign companies are moving their production there. We are strategically positioning ourselves." In the aftermath of the controversy surrounding DPW’s proposed managment of container berths at six US ports, industry analysts maintain that Asian ports are more attractive to DPW than the US operations initially obtained in the takeover. For example, the P&O acquisition gave DPW the key strategic port of Qingdao, which has a throughput of six million TEUs. With annual volumes of 1.5 million TEUs and 1.3 million TEUs respectively, Hong Kong and Shekou are DPW’s other major facilities in China. DPW is also present in Yantian and Yantai. A letter of intent to develop the new terminal was signed in Dubai during a visit by a Chinese delegation, led by Tianjin’s executive vice-mayor Huang Xing Gua. The Phase 2 Container Terminal Project in the Bohai area of northern China includes plans for a 140-hectare terminal area, with a 1400m quay, and an annual handling capacity of 2.2 million TEUs. Reclamation work for the project is already underway and operations are scheduled to begin in 2011. Tianjin falls under the central government’s authority and the region’s industrial development is part of Beijing’s plans to achieve balanced growth among various regions. Meanwhile, Yemen’s attempt to renegotiate elements of the Aden Port concession deal has surprised DPW officials. “We thought it was finished, but apparently they still have some issues. I do not know what the issues are,” said DPW chairman Sultan Ahmad Bin Sulayem. The ports operator won an international tender last year to operate the southern port of Aden under a 30-year concession.

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