A joint venture (JV) between Mumbai-based logistics firm United Liner Agencies of India (Pvt.) Ltd and Dubai's DP World Ltd has won the rights to construct an additional container loading facility at Union government-owned Visakhapatnam port in Andhra Pradesh.
"The revenue share price bid of 11.04% placed by Visakha Container Terminal Pvt. Ltd was accepted by the board of trustees of the Vizag port today," a trustee who attended the meeting said on Friday. A second trustee confirmed the development. Both spoke on condition of anonymity ahead of a formal announcement by the port.

Spokesmen for Vizag port and Visakha Container Terminal confirmed the development.
The project involves expanding the container loading capacity at Vizag port by 600,000 standard containers a year with an investment of Rs.750 crore.

Visakha Container Terminal, which has been running the existing container loading facility at Vizag port since June 2003 on a 30-year contract, is 74% owned by United Liner Agencies. DP World, majority owned by the Dubai government, owns the balance stake in Visakha Container Terminal, which can load 400,000 standard containers a year.

The expansion project is a part of the shipping ministry's plan to bid out 30 port projects worth Rs.24,633 crore by March to add 288.48 million tonnes of cargo handling capacity at the 12 ports owned by the Union government.

In the first round of price bid in May, Visakha Container Terminal had quoted a revenue share of 4%, which the port rejected. The port then asked for fresh price bids from the shortlisted bidders.

Port contracts are decided on the basis of revenue share-the entity willing to share the most from its annual revenues with the government-owned port wins the contract, typically stretching over 30 years.

Between April and November, Visakha Container Terminal loaded 175,000 standard containers, compared with 166,000 standard containers it handled a year earlier.
"It's a project that east coast of India needs,"said a Chennai-based port consultant, declining to be identified.

Vizag port now needs to grant approval to set up more container freight stations (CFS) to service the terminal, said the consultant cited above. Its three existing container freight stations are operating at more than 100% capacity. About half a dozen firms have put in applications to set up more CFS at Vizag.

A CFS is a facility licensed by the customs department to help decongest a port by shifting containerized cargo and carrying out customs-related activities outside the port area.
The port consultant also said the shipping ministry has to relax rules to allow foreign shipping lines to carry container cargo between local routes to help the Vizag terminal attract more cargo. Transporting cargo between local routes are reserved for Indian registered ships, according to a so-called cabotage law.