S'pore firm eyes stake in local cos

MUMBAI: APL, the container transportation arm of Singapore-based Neptune Orient Lines (NOL), is eyeing equity stake in container terminals and inland container depots (ICDs) in India. The company is in talks with private parties, operating ICDs in Delhi, Punjab and Haryana, for buying a stake. To achieve its targeted growth, APL will invest in the upcoming container terminals as well,

The company has submitted expression of interest (EoI) for building the fourth terminal at Jawaharlal Nehru Port Trust (JNPT) in Mumbai. APL is considering to form a consortium with other companies to submit the technical and financial bid. “APL is planning set up its own ICD in Haryana. We will acquire 50-acre land for the new ICD. The choice of ICDs will be based on three parameters including location, service and cost,” said Kenneth Glenn, president (South Asia), NOL.

APL IndiaLinx, a 76:24 joint venture between NOL and Hindustan Infrastructure Projects and Engineering (HIPE), owned by BPL Mobile founder Rajeev Chandrasekhar, is planning an initial investment of $60 million in the container rail freight service. The investment will go into rail licence, rolling stocks, construction of ICDs and IT infrastructure. The JV had flagged off its first rail freight rail service between ICD-Loni near Delhi and JNPT’s Nhava Sheva terminal in May.

“APL is planning to add eight more freight rails by 2008, which will enable us to make 11 round trips every week between the depots in north India and the ports. The depots will offer shippers and third party transportation providers a point of contact to co-ordinate inland and marine freight. The second train is expected to ply on the same route within a week. Three more trains will be added this year,” said Mr Glenn. According to an NOL research, India may miss out on an additional 1-2% of annual GDP growth, unless it improves its transportation connections to global supply chains.

The Indian container market has been growing at a compounded annual rate of almost 20% over the past five years. This is mainly due to the growth of export & import in the country. Indian exports have been growing at 20% in the last five years since 2002-03, while imports during 2005-06 were valued at $142.4 billion, recording a 27.7% growth rate. The country is targeting a $150 billion merchandise exports by 2009, enabling India to increase its share of world trade to at least 1%. This will help the container segment grow in the country.