The Hindu : Tamil Nadu / Chennai News : Chennai port signs agreement to set up second container terminal

Online edition of India's National Newspaper
Thursday, Mar 08, 2007
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Tamil Nadu

Tamil Nadu - Chennai

Chennai port signs agreement to set up second container terminal

Special Correspondent

A joint venture firm will develop the project

MILESTONE: Chennai Port Trust chairman K. Suresh (left), exchanging documents with Peter Chew, managing director of PSA India Limited, in Chennai on Wednesday. Ashwin Muthiah, vice-chairman of Sical Logistics Limited, is in the picture. — Pho to: R.Ragu

CHENNAI: The Chennai Port Trust on Wednesday took another step towards achieving its objective of becoming a container hub on the east coast by entering into a licence agreement with Chennai International Terminals Private Limited (CITPL) for developing the second container terminal.

CITPL, a joint venture of PSA International Pte Limited and Sical Logistics Limited, will develop the project on a build-operate-transfer basis at a cost of Rs.492 crore. The terminal's rated capacity would be eight lakh TEUs (20-foot equivalent units) a year.

Signing the 30-year agreement, Chennai Port Trust chairman K. Suresh said the project came at a time when the container traffic was on the rise. The port had seen 20 per cent growth in container traffic. It would take two years for the second container terminal to be established.

With more mainline vessels — similar to the one connecting various destinations in the United States and Europe to be introduced on March 16 — expected to call and with the development of the second terminal, the port would become a container hub.

There was also potential to develop a couple of more terminals in Chennai, he said.

CITPL emerged as the successful bidder with its offer of 45.801 per cent revenue share. It would pay nearly 46 paise on every rupee it earned. The minimum guaranteed throughput would increase from 1.5 lakh TEUs during the first full year of operation to five lakh TEUs by the end of the third year.

Dredging

The Port Trust would invest Rs.100 crore. This covered the cost of reclamation of seven hectares and dredging. It would hand over the land on April 1, Mr. Suresh said. Peter Chew, Managing Director, PSA India, said the presence of PSA (Port of Singapore Authority) would increase in the country. PSA-Sical was operating the container terminal at Tuticorin.

Ashwin Muthiah, vice-chairman, Sical Logistics Limited, thanked the port and the Union Ministry of Shipping, Road Transport and Highways for the opportunity given to the company.

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