Hutchison joins Shanghai port building
By Zou Huilin (China Daily)
Updated: 2004-09-30 08:38

Shanghai International Port (Group) Co Ltd signed a contract yesterday with Hutchison Port Holding Limited, the daughter company of Hutchison Whampoa controlled by the Hong Kong tycoon Li Ka-shing, for the Waigaoqiao Phase 5 joint venture project.

The new joint venture company formed by the contract will be invested by the two portal administration groups with 50 versus 50 per cent shares. The total capital of the project is 4 billion yuan (US$481.93 million).

The duration of the joint venture will be 50 years.

The Waigaoqiao Phase 5 project is located in the Waigaoqiao region of Shanghai's Pudong District and it will have four 10,000-ton berths, two 3,000-ton berths and 14 cranes.

Lu Haiwu, president of Shanghai International Port Group, said, "The project is scheduled to be completed by the end of this year with the collaboration of the two groups, and after completion, the project will offer a container-handling capacity of over 22 million tons, which will substantially improve the container-dealing capacity of Shanghai to 15 million tons in 2005."

An official from Shanghai Portal Administration Bureau, said that this year's container handling is expected to reach 14 million tons, roughly a 3 million ton increase when compared to last year's 11.28 million tons.

John E. Meredith, group managing director of Hutchison Port Holding Limited, said he believes the two groups will have good co-operation. He said that the smooth operation of Shanghai Container Terminals (SCT), a joint venture between the two groups since 1993, had established great confidence for Hutchison Group.

He said, "We are developing 35 ports and over 200 berths all around the world. However, the one in Waigaoqiao is the quickest development we have ever seen. It is really remarkable."

An official of the municipal port authority said the Waigaoqiao Phase 5 project would be a great improvement to traffic, but the solution to transport bottlenecks caused by the lack of a decent deepwater port would be the Yangshan Port Project.

Insiders say that the municipality is planning to spend several million dollars on the first phase of the Yangshan Port Project, a deepwater project which will make the city the world's biggest container handler by 2010.

Several overseas operators including Hutchison Whampoa, have expressed interest in investing in the Yangshan Port Project.

Meredith said that Hutchison Whampoa has been discussing the matter with officials from both the central and local governments, but everything was still in the discussion stage and no detailed plan or contract has been reached yet.

The port official also said that the co-operation between the two groups would not create pressures for other ports throughout China.

Lu Haiwu said that though many hold that Shanghai and Shenzhen ports are in a kind of competition, the fact is that they are not, because the major clients for the two ports are very different and the two ports function differently.

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