TN terminals to challenge DP World monopoly

The acquisition of P&O Terminals by DPW in early 2006 gave the company a 50 per cent share of the terminal operations in India and more than 75 per cent share in south.

However, DPW could lose some of this share if its global competitors get the new terminals at Chennai and Ennore. Some of them include Maersk, APL, NYK and CMA-CGM. Incidentally, DPW is also one of the bidders for both the terminals.

For financial year 2008, the 12 major ports handled 6.60 million twenty-foot equivalent units (TEUs), up from 5.44 million TEUs in the previous year. Of this, DPW handled over 50 per cent of the boxes.

In the south, DPW has a 76 per cent share of the total two million TEUs. PSA-Sical, which operates in Tuticorin and will run the second terminal in Chennai, has the rest.

The Chennai Port Trust (ChPT) has entered into a 30-year license agreement with Chennai International Terminals, a special purpose vehicle (SPV) jointly floated by PSA-Sical consortium for the second container terminal at an estimated cost of around Rs 500 crore.

The terminal is likely to commence operations by 2009-end. According to port trust sources, the work on the terminal is in progress.

ChPT had also invited requests for qualification (RFQ) from developers for a mega container terminal at a cost of over Rs 3,000 crore. Around 22 domestic and foreign companies, including DPW, have shown interest in the project, which is likely to start operations by 2012.

S Mohan, a Chennai-based shipping consultant said, for the trade competition ensures attractive pricing.