Singapore’s PSA inducts strategic partners in Indian terminal assets
Singapore-based global port operator PSA International Pte Ltd has inducted financial interest parties as strategic partners in some of the container terminals it runs in India, Group chief executive officer Tan Chong Meng has said.
PSA International, a unit of Temasek Holdings Pte Ltd, the sovereign wealth fund of Singapore, also said it does not intend to take on a local partner in the Bharat Mumbai Container Terminal Pvt Ltd (BMCT), the wholly-owned entity that runs the newly opened facility at Jawaharlal Nehru Port Trust (JNPT) near Mumbai.
“We don’t have a local partner at the moment in BMCT and at the BMCT concession level we are quite happy to continue to be the main driver,” Tan told BusinessLine during a visit to India on February18.
“We have already taken on board some financial interest parties as strategic partners at a higher level, covering a few assets in India. As you know, different people are interested in infrastructure projects these days. They are funds, sovereign strategic players so on and so forth,” said Tan.
“At the operating level, the PSA proposition is a pretty strong one. But, ports are a heavy financial commitment and expense and we do share some of that exposure, that financial opportunity with strategic partners,” he added without divulging details about the strategic partners.
PSA, one of the earliest global firms to invest in port terminals in India when it was opened to private funds in the late 1990s, currently runs facilities at Chennai Port Trust, VO Chidambaranar Port Trust, Kolkata Port Trust, JNPT and Kakinada port .
The firm, one of the top three global container terminal operators, has invested over $2 billion in these terminal assets in India.
Of these, PSA has a local partner only at its facility in VOC Port Trust, where Sical Logistics Ltd holds a 37.5 per cent stake in PSA Sical Terminals Ltd. Before BMCT, PSA had a market share of some 13-14 per cent of the containers handled at India’s ports. “With BMCT, we have the potential, within a few years, to get to maybe 20 per cent or above and that is a meaningful percentage,” said Tan.
Container traffic at Indian ports is estimated to grow at 6-8 per cent, riding on improvement in export-import trade in sectors such as chemicals and automotive/ancillaries, according to CRISIL Research, a unit of CRISIL Ltd.
Incremental container traffic from newly opened terminals at JNPT and Kamarajar Port Ltd and upcoming facilities at Vizhinjam and Dhamra ports are expected to further augment this growth.
“Over the five years through fiscal 2022, as container traffic growth outpaces other segments, its share in total traffic handled at Indian ports is expected to increase to 19 per cent from 16 per cent now,” said Prasad Koparkar, senior director at CRISIL Research.
Source: The Hindu Business Line