x Abu Dhabi, UAEFriday 21 July 2017

DP World waits to hear on Indian port reforms

Reported planned policy reform to allow foreign ships to transport cargo between ports within India to and from DP World's Vallarpadam terminal in Kerala would provide a huge boost to the facility.

MUMBAI // Reported planned policy reform to allow foreign ships to transport cargo between ports within India to and from DP World's Vallarpadam terminal in Kerala would provide a huge boost to the facility the Dubai company has invested in and operates.

The terminal has struggled since it opened in February last year under current shipping law with the port developed on an understanding foreign ships would be able to transport container cargo between ports in India, industry sources said.

"The investment is not working because the terminal was built on the premise that it would be a transshipment terminal," said a source, who declined to be named.

DP World, which has invested substantially in India to capitalise on the country's economic and foreign trade growth of recent years, is the single largest container terminal operator in India.

There were reports in the Indian press yesterday that the government was planning to relax the law.

The shipping ministry has proposed to change the law in a move that would only allow foreign shipping lines to transport container cargo between Indian ports going to and from Vallarpadam, the business newspaper Mint reported, citing unnamed government sources.

There have been previous reports such a reform was close but no change to the law has materialised.

The terminal at Vallarpadam, located in Cochin in Kerala, is a public-private partnership between DP World and the Indian government, which has built and improved supporting infrastructure, including a four-lane highway connecting the terminal to the rest of India.

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