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More creepy acquisitions at ports

After US row, Dubai Ports brings battle to the subcontinent as it picks up stake in India, writes Prerna K Mishra.

india Updated: May 15, 2006 00:38 IST
Prerna K Mishra
Prerna K Mishra

With opinion in the US split over allowing Dubai Ports World to manage six ports there, the battle for controlling port resources has shifted to the subcontinent.

The UAE state owned operator has bagged the contract for developing two container terminals in Kerala and will develop a private port in West Bengal as part of a consortium. Next, the company is eyeing the contract for the Gwadar Port in Pakistan.

Sources say the resistance in the US has forced the DPW to withdraw and it is thinking of selling all its US ports operations — at the New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia docks — to an American buyer.

In India and Pakistan, too, opinion on whether the DPW should control the shores is divided.

The concerns in India are twofold. One is over security — like it was when it came to allowing in telecom players like Huwaei and Orascom. "It's for the government to take a call over the security angle,' says the CEO of a shipping major in India. "But if you poll the traders, the bigger concern with them is about having a monopoly player in the region."

The trade's concern become obvious after a look at the DPW's footprint in the region.

The company has sweeping stakes: starting from UAE-Bandarabbas-Dubai to Karachi, down to Mundra in Gujarat, Nhava Sheva in Mumbai, the Chennai Container Terminal and finally Colombo.

In India, the DPW has been working with three state governments — Kerala, West Bengal and Andhra Pradesh — for participation in building, developing and maintaining ports.

But trouble seems to be following the company wherever it goes. "Pressure seems to be mounting on the state governments to address both the security and monopoly aspects before offering projects to outsiders," said a source.

"With the DPW, the concerns stem from the fact that after acquiring UK-based P&O, it has already got default control over Nhava Sheva in Mumbai, the Chennai Container Terminal and the Mundra International Container Terminal (MICT) in Gujarat." Gujarat is said to considering blocking the deal on the ground that the DPW's proposed takeover of the MICT violates a previous contractual agreement signed with P&O. The DPW has already had to exit from the Gangavaram port project in Andhra Pradesh. The company is still active on West Bengal project it inherited after the acquisition of P&O and is likely to start the tendering process for the Kerala container terminal projects soon.

First Published: May 15, 2006 00:38 IST