DP World kick-starts $200 million Mumbai container terminal

MUMBAI // DP World is expanding its operations in India, with the aim of tapping the country's economic growth and boosting the strong trading links between the UAE and India.

The Dubai ports operator yesterday announced the ceremonial laying of the foundation stone by India’s minister of shipping, GK Vasan, for a US$200 million container terminal it is developing near Mumbai, in a significant mark of progress for the project. DP World is investing, building and will operate the new facility at Jawaharlal Nehru Port in Navi Mumbai, where the company already operates a terminal.

DP World has invested more than $1 billion in India in recent years to become the largest container terminal operator in the country, having moved early to capitalise on the country’s potential economic and trade growth. The company operates five container ports in India, including facilities in Gujarat, Chennai and Kerala, as well as a train service for cargo.

“The close relationship we have with our partners [at the port] and the other parts of India is mirrored in the relationship between India and the UAE themselves,” said Sultan Ahmed bin Sulayem, the chairman of DP World, in Mumbai yesterday. “There is no more important trading partner for the UAE than India. … Trade between us reached a value of close to $75bn in 2012. That trade will now slowly grow. India’s economic growth has been stellar in the past and is set to be stellar again. As the busiest gateway and hub in India, Nhava Sheva has been constrained in the past by lack of facilities, which has impacted trade.”

India was the leading destination for Dubai exports in the first nine months of last year, accounting for 21 per cent of its exports, according to data from the Dubai Media Office.

Jawaharlal Nehru Port is India’s largest container port. It handled 64.5 million tonnes of cargo during the financial year that ran to the end of last March.

The new terminal, which will have a 330 metre-long quay, is expected to open for business next year, DP World said.

The Dubai company won the contract in November 2012 to build the terminal at Jawaharlal Nehru Port. The agreement was signed through a subsidiary of DP World, Nhava Sheva Gateway Terminal.

“For the last five years, India’s premier port has been in critical need of capacity with container trade rising,” said Anil Singh, the senior vice president and managing director of DP World Subcontinent.

The port is congested and operating beyond capacity and the new terminal would add 800,000 standard container units worth of capacity to the port, DP World said.

Wharf construction has already started and equipment, including cranes, has been ordered.

Mr Vasan said that he was confident that the project could contribute to the port eventually becoming one of the top 10 container ports in the world.

“The development of the projects around ports require a lot of investments,” he said. “In India, container volumes are expected to witness exponential growth. Container terminals at major ports help in furthering international trade. Building new container terminals will help meet the growing global demand.”

India was targeting a three-fold growth in the capacity of its ports from one billion metric tonnes per year in January 2011 to 3.25 billion metric tonnes in 2020, he said.

Mr bin Sulayem admitted that there were challenges with doing business in India.

“We understand that things take time in India and that’s not only us – that’s everybody. The demand and the growth in India is very good and that’s why we are investing.”

Globally, DP World handled 55 million container units last year, which was a marginal expansion of 0.7 per cent compared with the year earlier.

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