Dubai's DP World has acquired a 100 per cent stake in the container terminal at Chennai Port in India for an undisclosed sum, after buying out its partner's shareholdings in Chennai Container Terminal Pvt Ltd.
The company said in a statement that the main factors behind its decision to take ownership of the box terminal are moves to expand its terminal business in Chennai combined with strong growth in South Indian trade and the partners' desire to reinvest resources in their respective core businesses, reports Khaleej Times Online.
DP World senior vice president and managing director of the Indian Subcontinent region and chairman of Chennai Container Terminal Ganesh Raj said the company plans to expand the box terminal's handling capacity in future, without giving further details.
This development comes amid media reports in India that DP World Chennai has to pay Chennai Port Trust (ChPT) INR915.1 million (US$21.71 million) as compensation for not achieving the minimum container throughput stipulated for non-transhipment traffic.
"The ChPT encashed a bank guarantee of INR460.8 million from DP World Chennai. The private operator also paid, under protest, a demand draft of INR177.8 million to ChPT," unidentified sources were cited as saying in the report.
The Port Trust is reportedly demanding payment of INR276.5 million from DP World Chennai for 'non-achievement of non-transhipment' traffic between December 2006 and November 2007.
"DP World's contention is that containers meant for neighbouring ports should also be considered as containers falling under the 'non-transhipment' traffic category. However, the Port Trust did not accept this argument citing the norms prescribed in the Licence Agreement between ChPT and the then Chennai Container Terminal Limited in September 2006," the report added.
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