Dubai Ports World said it may invest $1 billion in its Indian port to enable handling of the largest container ships as the company tries to challenge Colombo’s grip on India's maritime trade with Europe and China.
A news report here, quoting officials in India, said DP World spent about Rs 13 billion ($288 million) on the first phase of the Vallarpadam facility, which will have an initial capacity of 1 million twenty-foot equivalent containers a year.
"What we are trying to do is compete in the regional and international market," Anil Singh, the company's India head, was quoted by Arabian Business as saying.
"It will change the logistic pattern of the country," he said, adding, "The new terminal at Vallarpadam in Kochi, which is due to open in August, will be able to handle the 13,000-container capacity ships commonly used on Asia-to-Europe routes."
Presently, these long-haul vessels are unable to stop in India, which forces the nation's importers and exporters to spend an extra $150 million a year ferrying goods to and from Colombo, Singapore or Dubai, Singh said.
Dubai World is the state-owned holding company that owns 80 per cent of DP World.
According to the official, the remainder of the investment will cover a second phase, which will add another 3 million boxes of capacity within five years, he said.
Container Corp Of India Ltd is among the three other partners in the joint venture terminal.
According to the report, DP World will pay for its share of the investment using its own funds.
Kochi aims to lure large container vessels from Colombo, which presently handles as much as 40 per cent of India’s trans-shipment trade, Singh said.
Indian shippers use the Sri Lankan port because of lower costs, deepwater facilities and looser regulations.
DP World already handles almost half of India's annual container volume of 8 million at five ports across the country, he added.
The company, which has spent about Rs 80 billion in India, is pursuing further projects and expansion plans in the country, he said.
Worldwide, the port operator runs terminals in 27 countries -- from the UK to China -- and is building new facilities in four other nations.
It handled 43.3 million containers at 50 ports last year, including at those it operates without ownership.