P&O buyout gives container industry jitters

Gulf buyer seen wresting control of major container terminals.

The domestic container shipping industry is keeping its fingers crossed as the Gulf-based Dubai Ports (DP) World is all set to acquire almost all major container terminals of the country following its takeover of UK-based ports and ferries company Peninsular & Oriental Steam Navigation (P&O).

"In a mega acquisition five major container terminals in India have come under the control of DP World. This is a matter of concern for Indian container shipping trade as DP World could dominate the export and import trade," a senior shipping line executive said.

Earlier, DP World had taken over P&O for £3.3 billion ($5.69 billion) to create the world's third-largest ports company.

He said the industry is adopting a "wait and watch" stance as DP World has not declared their policy about managing the terminals in India.

DP World, through this acquisition, has gained control over Nhava Sheva International Container Terminal (NSICT) in Mumbai, Chennai Container Terminal (CCT) and Mundra International Container Terminal (MICT).

DP World has already bagged the Build Operate Transfer (BOT) project for developing international container transhipment terminal (ICTT) at Vallarpadam, Kochi. They are also operating Visaka Container Terminal in association with Mumbai-based JM Baxi at Visakhapatnam Port.

According to sources, P&O Ports has engaged a consultant to study the feasibility of acquiring a major stake in Kulpi Port, a minor port in West Bengal.

"The presence at busy and profitable container terminals is going to give them monopoly over operations which is worrying the Indian shipping industry. Though the regulator, Tariff Authority for Major Ports (TAMP), is there to monitor the affairs of major ports, DP World could be a decisive force since it is backed by the Dubai government," a shipper said.

Mumbai and Nhava Sheva Shipping Agents Association (Mansaa) president C S Manohar said since the strategy has not been finalised by DP World, Indian shipping intermediaries will have to wait and watch.

"If DP World is influencing the policy decisions of the government through its dominant position, then that is a matter of concern," Manohar said.

An executive from Western Shippers Association of India (WISA) said the government should induct clauses to safeguard the interest of shippers from monopolistic trade practices from terminal operators.