Dubai Port (DP) World, leading global port operator with 42 container terminals across 22 countries, has announced that it would invest another $500 million in the next few years in India, taking its total investments to $2 billion in the country so far.
"We are open to any opportunities that may come our way," Mr Jamal Majid bin-Thaniah, Executive Vice-Chairman of DP World and Group CEO of Port and Free Zone World, told visiting reporters here.
Currently, DP World operates terminals in India at Mundra in Kutch district, Nhava Sheva International Container Terminal (NSICT) in Maharashtra, Chennai, Kochi and Vishakhapatnam. It handled four million TEUs in India last year, including 6,50,000 TEUs at Mundra.
The company is scouting for opportunities in the areas of back-up infrastructure for port operations, including providing facilities to connect various special economic zones, dry ports and inland container depots (ICDs) across the country to container ports via rail and road, Mr Ganesh Raj, Managing Director and Senior Vice-President of the company's subcontinental operations said.
Replying to a question about DP World's reported exit from its US operations on security-related issues, Mr Thaniah said that there was a "misconception amongst a section of politicians" in that country in what he said was an "isolated" case triggered by rivals. "But the US President endorsed our viewpoint." The US Congress had apparently opposed the takeover of P&O Ports globally by DP World.
About a related question of DP World also facing trouble about its existing Mundra International Container Terminal (MICT), he said talks were in progress both with Gujarat Maritime Board and the Adani Group, and expressed hope of an amicable settlement.
Legal battle
Recently, DP World was locked in a legal battle with the Adanis over the transfer of "ownership" of the second container terminal at Mundra from P&O Ports to MICT. The Adanis, who had originally developed MICT and gave it to P&O Ports to operate, had sold out their stake in existing MICT to P&O Ports for Rs 1,200 crore in the first terminal.
According to sources, as per the agreement between the Adanis and P&O Ports, the former were supposed to hand over control of the second container terminal as well to P&O ports once they achieved a container cargo throughput of seven lakh TEUs.
However, this target could not be achieved as MICT handled only 5,21,000 TEUs in 2006-07. MICT later moved the court in Ahmedabad invoking the dispute resolution clause in the MICT sub-concession agreement, based on the reliefs claimed by MICT, and sought an injunction against the operation of a second container terminal for handling container cargo by the Adani Group.
The framework agreement contemplated a payment of $70 million by MICT to the Adanis for handing over the second container terminal. It contemplated a non-compete clause restricting the Adanis' right to carry on a container terminal business outside the port of Mundra in Gujarat.
The Adanis opposed the application saying that the framework had been superseded by the MICT sub-concession agreement overwriting all previous agreements between the parties. The Ahmedabad court rejected the interim application by MICT, which invoked the arbitration clause and appointed an arbitrator.
It has now filed an appeal in the High Court at Ahmedabad and notice of the same was received by the Adani group on October 18, 2007. The date of hearing in the case has been fixed for November 28, 2007.
Issue progress
However, DP World is still holding talks with the Adanis. "We hope that we move forward because we both are businessmen. We want the issue sorted out and we have an ongoing discussion with the Adani Group for phase two of the container terminal. Following negotiations, the Adani Group is expected to transfer assets to DP World," Mr Thanaih said.
The Adanis, whose IPO to raise up to Rs 1,771 crore for the development of Mundra Port and SEZ is scheduled to hit the capital market on November 1, 2007, have cited this case amongst the risk factors in their Red Herring Prospectus (RHP).
The sources in Adani Group, however, maintained that they would have no problem in discussing the issue with DP World once it sorts out the issue of show-cause notice served by the Gujarat Maritime Board (GMB), questioning the operating rights of MICT.
Mr Ganesh Raj said that it was an "old issue" and that DP World had already provided facts to GMB. "As far as we are concerned, we believe that we have answered the queries of GMB to their satisfaction," he said.
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