Hutchison Whampoa - Hong Kong's International Port Operator

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Port of Sohar - Container-terminal plans in the works
4 November 2005
Tradewinds

Part of the facilities included in the business plan for the Port of Sohar is a large container terminal.

An agreement was reached at the end of September to form a joint venture between Hong Kong-based Hutchison Port Holding, C Steinweg of the Netherlands and the Government of Oman, including local Omani investors, to operate the terminal.

The joint venture will be called Oman International Container Terminal (OICT). Paving and equipment installation started immediately thereafter to allow container operations to commence in April 2006.

The first terminal has two main line berths equipped with post-panamax gantry cranes and a 16-metre draft capacity. Construction of additional OICT container berths will start later this year and come onstream towards the end of 2007 with single or double berth increments. These terminals will have 18 metres of water depth to be able to accommodate the larger containerships of the future.

OICT will start with serving containerised shipments generated by industries in and around the Port of Sohar. Alexander Haex, SIPC's commercial manager, explains that while the container port is designed to serve the local market, it could in all likelihood become competition for the region's other ports if a healthy transhipment business develops.

"It has never been our intention to take away business from other ports but if our own import and export volumes result in Sohar becoming a port call on the routes of liner majors, I have no doubt that some feeder operations to regional ports will develop," he said.

Jan Meijer, SIPC's chief executive officer, is confident that the liner majors will come. "The Port of Sohar is strategically located in the Gulf region outside the Strait of Hormuz. It has a massive upcoming industrial base generating containerised exports. The region is also a major importer of consumer goods. These factors will support an increase of container traffic and will attract direct calls to Sohar by the world's leading container-vessel operators," he said.

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Indian Ports - Hutchison rebuffed on security concerns
By KATHRIN HILLE and KHOZEM MERCHANT
7 November 2005
Financial Times

India has rejected Hutchison Port Holdings, the world's largest independent port operator, from a list of potential bidders for a Dollars 270m offshore container terminal project in Mumbai, citing national security concerns.

The development underscores Indian intelligence authorities' deep anxieties over what they regard as the creeping presence in India of entities controlled by, or linked to, China.

Hutchison Port failed to win security clearance to build and operate the Mumbai Port Trust container terminal "because of its Chinese connections", according to a senior executive at the country's largest ports authority.

Hutchison Port is part of the Hutchison Whampoa group controlled by Hong Kong billionaire Li Ka-shing. Hutchison Port declined to comment, but people familiar with its position said it had appealed against the decision.

Evergreen, the Taiwanese transport services company, also failed to win security clearance for the Mumbai container project for similar security reasons, according to the same executive at Mumbai Port Trust.

Evergreen said it was "surprised and upset" but was trying to communicate with the Indian authorities in order to clarify that Evergreen was not a Chinese enterprise.

"As a group which has invested in port operations all over the world, we have never encountered suspicions over security in any other country," the company said. Evergreen said security clearance for port projects had been established by the Indian authorities because China had been seen as an ally of Pakistan. "But Hong Kong is Hong Kong and Taiwan is Taiwan," the company said.

This is the second time Hutchison Port's bid to enter the Indian port management market has foundered on security grounds. About a year ago the company suffered a similar rebuff when central government security agencies removed it from a shortlist of candidates bidding to operate a terminal at Jawaharlal Nehru Port in Mumbai, India's busiest.

Evergreen also encountered security concerns when it bid for building and operating contracts at Jawaharlal Nehru Port last year and five years ago. However, it passed clearance after convincing authorities it had no Chinese ties.

An application by Huawei, China's largest telecoms products manufacturer, to expand its operations in India has also provoked hostile reactions from senior Indian security officials.

Hutchison Port and Evergreen were among 11 Indian and foreign companies that submitted so-called "expressions of interest" in a public-private project with Mumbai Port Trust.

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HK's Hutchison Whampoa unit bids for UK's P&O in 3 bln stg deal -report
7 November 2005

HONG KONG (AFX) - Hutchison Whampoa unit Hutchison Port Holdings is among several companies interested in buying Peninsular and Oriental Steam Navigation (P&O) of the UK in a deal estimated to be worth more than 3 bln stg, the South China Morning Post reported without identifying any source.

The race for P&O's takeover is said to be confined to Hutchison Port, Singapore's PSA International and APM Terminals of Denmark, who are all deemed capable of matching a minimum 3 bln stg bid to be offered by Middle East port operator DP World.

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Hutch in 10b yuan port venture

Hutchison Port Holdings, a unit of tycoon Li Ka-shing's Hutchison Whampoa, said it has agreed to take a controling stake in a joint venture to expand Shenzhen's Yantian port - a project which involves total investment of more than 10 billion yuan (HK$9.59 billion)

Hong Kong Standard
Wednesday, November 09, 2005

Hutchison Port Holdings, a unit of tycoon Li Ka-shing's Hutchison Whampoa, said it has agreed to take a controling stake in a joint venture to expand Shenzhen's Yantian port - a project which involves total investment of more than 10 billion yuan (HK$9.59 billion).

Hutchison Port said it will own 65 percent of the venture, while Shenzhen Yantian Port Group will hold 35 percent. It didn't disclose how much each firm will invest in the expansion project at the Yantian International Container Terminals.

"We firmly believe that South China will remain one of the fastest- growing regions in the world," said Li, Hutchison Whampoa chairman. "This provides Yantian Port with a great opportunity for further development."

Hutchison Port and other port operators such as Modern Terminals, China Merchants Holdings (International) and Singapore's PSA are stepping up expansion in China, betting that the country's external trade continues to surge.

Hutchison Port's latest agreement in Yantian port followed last month's announcement that it will form a 50-50 joint venture in Dalian to develop an ore terminal involving investment of 2.2 billion yuan.

Hutchison Port is also developing the HK$6.6 billion third phase of the Yantian port, which is expected to be completed by the end of this year. The company also has investments in Shanghai, Ningbo and smaller cities such as Xiamen and Zhuhai.

Shenzhen handled 13.7 million standard 20-foot container boxes in 2004, up 28 percent from 2003, Hutchison Port said. Yantian port accounted for about half the city's total throughput, it added.

The expansion project will raise total area of the Yantian International Container Terminals by 136 hectares, about 65 percent of the combined 208 hectares of the current three phases, Hutchison Port said. It will also add six new berths on top of existing nine.

The project was approved by the central government in March, and the first berth will be operational in the second half of 2006, Hutchison Port said. The entire project is expected to be completed by 2010, it said.

Throughput at its Yantian deepwater port operations rose 21 percent in the first half this year, and earnings before interest and taxes jumped 17 percent, a Hutchison Whampoa's interim report said. Hutchison Whampoa derived HK$14.4 billion revenue from its ports and related services in the first half, or about 15 percent of total turnover.

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Shenzhen, Hong Kong Expand Yantian Container Port
14 November 2005
China Industry Daily News

Hong Kong's Hutchison Whampoa Port Group and Shenzhen Yantian Port Group have signed an agreement to expand the Yantian Container Port, the Xinhua website reported on November 11th.

The expansion project received approval from the National Development and Planning Commission in March of this year. It has a total investment of 11.48 billion yuan, with Hutchison Whampoa Port Group holding a 65% share, and Yantian Port Group 35%.

The Yantian Container Port expansion project will occupy an area of 1.36 million Sqm, covering five 70,000-100,000 tons berths and one 30,000-ton berth. Annual throughput is expected to reach 3.7 TEU. Large container ships with loading capacity over 10,000 TEU can stop at the port.

According to the agreement, the first berth will be put into use at the next half of 2006. Upon completion in 2010, the Yantian International Container Port will have a total area of 3.44 Sqm, including 15 deep-water container ship berths.

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HPH denies Yantian will edge out HK - Pearl River Delta logistics park a possible threat to hub role
10 November 2005
South China Morning Post

One of the world's leading port executives has denied his company's investment in the 10 billion yuan expansion of Yantian Port would erode Hong Kong's role as a hub for international transshipment.

However, others fear a customs-bound logistics park at the Pearl River Delta port would seriously dent Hong Kong's position.

"Transshipment is increasing [in Hong Kong]. Yantian does not handle transshipment now and its primary cargo is local cargo," according to John Meredith, the group managing director at Hutchison Port Holdings (HPH).

He said HPH - which has gained approval to expand the joint venture to 10 billion yuan from an initial 6.6 billion yuan - is happy to invest further in Hong Kong ports if demand is there.

Meanwhile, one of the eight customs-bound logistics parks in the mainland is to enter service in Yantian next month.

An official from the Shenzhen Administrative Bureau of Free Trade Zones told the South China Morning Post that the 0.96 square kilometre logistics park would have all infrastructure ready by the end of this month and was due for a customs inspection next month.

However, Yantian's upgrade from a free trade zone to a logistics park has the capacity to compromise Hong Kong's lead in the field of transshipment and logistics.

"Unlike a free trade zone, exporters in the mainland can claim their tax rebate immediately when their goods enter the customs-bound logistics park. At the moment, they have to export to Hong Kong to get the same treatment," said Louis Lee, of Yusen Air and Sea Service (HK), and a committee member of the Hong Kong Association of Freight Forwarding and Logistics.

The logistics park would also enable Yantian to perform post-production assembly allowing an exporter to outsource the assembly process to companies in the park, where, for example, a motherboard produced in Donguang could be assembled with a plastic case from Zhongshan and packed with a booklet printed in Japan.

The finished goods could then be exported from Yantian cheaper than by Hong Kong logistics companies operating from Kwai Chung and Kowloon Bay.

Mr Lee said Yusen handles import and re-export shipments, which account for 20 per cent to 30 per cent of total shipments.

Most of the factories in the Pearl River Delta are in the processing trade, turning imported tax-free raw materials into finished goods ready for export. If they want to assemble the semi-finished goods made from tax-free materials, they have to export it to Hong Kong to fulfil customs requirements.

Though Yantian established the zone in 1994, its customs-bound function has always been handicapped because exporters could not claim their value-added tax rebate when they entered the zone.

However, a senior manager said the rebates had dropped significantly, from 17 per cent to less than 10 per cent, depending on the goods being shipped.

Analysts, meanwhile, have dismissed fears that Yantian is running the risk of overcapacity.

"We expect the container port's utilisation rate to hold up well, mostly above 80 per cent, between 2005 and 2010," according to a Merrill Lynch report.

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Oman in port venture with Hong Kong, Dutch firms

MUSCAT, Nov 16 (Reuters) - Oman on Wednesday signed a joint venture deal with Hong Kong's Hutchison Port Holdings and Steinweg of the Netherlands to set up a container terminal at Sohar port.

The Oman International Container Terminal will be formed with investment from the government and the two companies, Economy Minister Ahmad bin Abdul-Nabi Mekki said after signing the deal. He did not give the cost of the project.

Sohar Industrial Port Co, which operates the Gulf Arab state's industrial port, is a joint venture between Oman's government and the Port of Rotterdam.

Container operations are scheduled to start in April 2006, a Hutchinson statement said.

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Yantian International Container Terminals Awarded the "Best Global Container Port of the Year 2005-06"
First Chinese Port to Receive a Global Award

Date: 27-10-2005
Corporate Press Release

On 26 October 2005, YICT was awarded the "Best Global Container Port of the Year 2005-06" by the Global Institute of Logistics (GIL) in London. This marks the first time that GIL has awarded such an accolade to a port operator and also constitutes
the first global award to be presented to a port in China.

Established in 2001, GIL has its headquarters in New York. The institute acts as an advocacy body for the global third party logistics (3PL) industry, and to that end works with its members to assist them in understanding the challenges faced in outsourcing the logistics process. Currently, GIL has 4,500 members comprised of logistics companies from all over the world.

GIL's decision to recognise YICT as the first seaport to be awarded the coveted title of Best Global Container Port was based on the GIL Awards Committee. The committee
acting on intelligence collated from members by the research department, reviewed the
areas covering service, productivity and contribution to the improvement of government
regulation in the application of technology, scale and coverage of service. Following a
unanimous decision by the committee, YICT was selected among the four short-listed
candidates as fulfilling the committee's requirements.

Commenting on the award Mr. Kieran Ring, CEO of GIL, said, "YICT demonstrates an
excellent customer service plus attitude that is evidenced across a wide spectrum of
services designed to enhance the competitiveness of the customers they serve. YICT
has been a proactive innovator in the appropriation of next generation technology, which
anticipates the changing needs and demands placed on the port industry as a whole.
Additionally, its management and executives have availed themselves to the global
logistics community in a way that we haven't witnessed before and have done much to
enhance port operator/shipper relations. Therefore we are delighted to honour them in
this way and encourage other port operators worldwide to look no further than YICT
when choosing an operation to emulate".

"I am honoured to accept this award on behalf of YICT. This accolade demonstrates the
recognition we have received from industry leaders and logistic experts in the efforts we have made to enhance our port facilities and services to best provide for the changing needs of our customers. In today's global economy, international businesses are
seeking further opportunities in sourcing globally. To survive, YICT has to be an integral part of that supply chain. Therefore we must support the logistics community to ensure our continued competitiveness", said Mr. Kenneth Tse, Director and General Manager of YICT, following the announcement of the award.

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Hutchison Sails Away from P&O Sale Saga
BY JAMES QUINN
6 December 2005
Daily Mail

HONG Kong giant Hutchison Port Holdings has privately ruled itself out of the running for P&O.

It is the second would-be buyer to distance itself and the UK owner of the giant Southampton and Tilbury container facilities.

P&O shares fell 22p to 472p yesterday as it emerged Singapore's Temasek is unlikely to bid.

This was a blow to investors who thought the group's stake-building was the prelude to an auction.

The only firm offer is a £3.4bn recommended deal from DP World, owned by the Dubai royal family. But even that could be in jeopardy if, as expected, Temasek, which holds 4.1pc, amasses 10pc of P&O.

By building its holding, it hopes to influence P&O's future - which could extend to derailing DP's offer.

Hutchison, meanwhile, has intimated it will not be playing a pivotal role in the saga - either as bidder or as part of a break-up consortium.

Instead, it has told its advisers at JP Morgan to simply keep a watching brief at this stage. Hutchison feels DP's 443p a share offer is fully priced and would find it hard to better that deal.

It was all action in the sector as Teesport-owner PD Ports (up 8p at 148p) confirmed it has had a second bid, from Australian investment house Babcock &Brown, just a week after recommending a 1401/2p-ashare bid from a consortium led by 3i.

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Hutchison Port plans to invest in Spanish terminal
Tue Dec 13, 2005 02:41 AM ET

HONG KONG, Dec 13 (Reuters) - Hutchison Whampoa Ltd.'s port operating arm, Hutchison Port Holdings (HPH), said on Tuesday it will buy a majority stake in a container terminal in Spain, in its third port acquisition in less than five weeks.

HPH said it has signed an agreement with Grupo Mestre of Spain to develop container Terminal Catalunya S.A. (TERCAT) in the Port of Barcelona, located in the northeast of Spain where 40 percent of the country's domestic container trade is handled.

But the company did not disclose the investment amount.

Hutchison, the world's largest container port operator, last month agreed to invest in a container terminal in the Port of Sohar, Oman, and boost its stake in an inland terminal in Duisburg, Germany, to 51.56 percent from 27 percent.

The Port of Barcelona is a major entry point to the Iberian Peninsular and is experiencing steady trade growth, HPH said.

"TERCAT has an established history in the port and we are positive the partnership will further expand TERCAT's capabilities in capturing the trade activities in the region," group managing director of HPH, John Meredith, said in a statement.

HPH, which operates a total of 242 berths in 41 ports, handled 47.8 million 20-equivalent-foot units of goods in 2004.

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Maersk, Hutchison invest in China's Yangshan Port
By Lucy Hornby

SHANGHAI, Dec 19 (Reuters) - A.P. Moeller-Maersk and Hutchison Whampoa Ltd. signed an agreement on Monday to buy into Phase II of the Yangshan deepwater port near Shanghai, becoming the first international investors to join the multi-billion dollar container project.

Maersk's port arm, APM Terminals, and Hutchison's port arm, Hutchison Port Holdings, will each take 32 percent of the four-berth project, which is due to be completed by the end of 2006, Maersk partner Tommy Thomsen said.

When fully completed, Yangshan could help Shanghai edge out Singapore and Hong Kong as the world's largest container destination and could draw business from other regional ports, such as Pusan in South Korea and Kaoshiung in Taiwan.

"I have no doubt that ... Yangshan will ensure the port of Shanghai becomes the biggest port within 3-4 years," Thomsen said.

Shanghai International Port Group (SIPG), which is 30 percent owned by China Merchant Holdings (International) , will take 16 percent of Phase II. COSCO Pacific and China Shipping Group will each have 10 percent.

The $1.24 billion, five-berth Phase I of Yangshan Port, owned by SIPG and its Shanghai-listed affiliate Shanghai Container Co. Ltd. , opened this month.

Phase II of the port will cost $740-$870 million, Liu Zuo Liang, chairman of port builder Shanghai Tongsheng Investment (Group) Co. Ltd., said at the opening.

Shanghai, ranked the third-busiest container port in the world by volume, had lacked a deepwater port before Yangshan was constructed from islands in the mouth of Hangzhou Bay. Silt at the mouth of the Yangtze had previously limited the size of ships that could call at Shanghai.

"Yangshan port opens up the possibility to bring in bigger ships to Shanghai," Thomsen said. "Potentially, in the future, Shanghai including Yangshan could become the major shipping area of Northeast Asia."

That could create competition for the port of Pusan in South Korea, which plans to double container handling capacity by 2011.

"The key issue is what port facility in the area will provide the best service in terms of deepwater, efficiency and competitive pricing," Thomsen said.

Maersk's container shipping activities to and from Korea will continue to be an important part of its business, he added.

MORE PHASES

Backed by China's strong exports in recent years, container terminals in Shanghai handled 14.89 million 20-foot-equivalent units (TEUs) of goods in January-October, up 25 percent year on year.

Its throughput growth has surpassed the country's southern boomtown of Shenzhen, which recorded about a 19.6 percent rise in volume to 13.38 million TEUs in the same 10 month period.

As Shanghai's traffic grows, Yangshan will add capacity, with current blueprints calling for around 30 berths and some government plans envisioning as many as 50.

Maersk could be a potential tenant and investor in the third phase and beyond, Thomsen said.

"My guess is we will have an interest in future phases," he said. The company owns a 49 percent interest in a joint venture developing the fourth phase of Shanghai's older Waigaoqiao port.

Hong Kong conglomerate Wharf Holding's Modern Terminals Ltd., which failed to get a slice in the Phase II of the project, hopes to participate in the third phase.

(Additional reporting by Alison Leung in Hong Kong)

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Li Ka-shing launches Shanghai Mingdong box port
By Keith Wallis in Hong Kong
21 December 2005
Lloyd's List

Hutchison Port Holdings officially launched Shanghai Mingdong Container Terminals as phase five of Shanghai’s Waigaoqiao container port on the same day the firm and four partners signed a deal for the second phase of Shanghai’s Yangshan port.

Hutchison Whampoa chairman Li Ka-shing and Shanghai International Port (Group) chairman Lu Haihu were all smiles at the opening ceremony even though Shanghai Mingdong Container Terminals will lose its bluewater services as Yangshan develops.

Under the development plan devised by Shanghai International Port (Group), Asia-Europe services that previously called at Waigaoqiao have already moved to the first phase of Yangshan which officially opened on December 10. Transpacific services are expected to follow next year.

In a further effort to encourage the shift in box volumes Shanghai International Port (Group) won approval from China’s Communications Ministry to raise box handling charges at Waigaoqiao by about 10% from next January

In an effort to make up for the expected downturn in box volumes at Waigaoqiao the major terminal operators, including Hutchison, APM Terminals and Cosco Pacific, have been given stakes in the second phase of Yangshan.

A deal confirming the shareholding, which also includes China Shipping Terminal Development and Shanghai International Port (Group) as partners, was also inked.

Shanghai Mingdong Container Terminals, a 50:50 joint venture between Hutchison Ports Waigaoqiao and the Shanghai International Port (Group), has four deepwater container berths with a quay length of 1,110 m and two barge berths totalling 190 m.

Phase five, which has a total area of 1.63m sq m, has 12 super panamax quay cranes, 48 rubber-tyred gantry cranes and a stacking capacity of 24,649 teu. The terminal is located about 110 nautical miles from Yangshan port and about 50 nautical miles from the Yangtze anchorage.

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HPH nears port expansion deal
24 December 2005
South China Morning Post

Hutchison Port Holdings (HPH) could be nearing the end of a five-year battle to expand the largest container complex in Britain.

After a public inquiry and an environmental impact assessment prompted by concerns of local residents, Britain's transport department has told Hutchison Port (UK), a subsidiary of HPH, that it is of a "mind to approve" further development of Harwich International Port.

HPH first applied for the expansion in October 2000.

"It is not the definitive decision, but we would see it as a favourable decision," said an HPH spokesman yesterday. There is still much documentation to be completed before getting final approval, he said.

The £300 million ($4 billion) project at Bathside Bay in Harwich will provide capacity for handling 1.7 million 20-foot equivalent units at a 1,400-metre long quay capable of handling four deep-water vessels at a time.

It is part of the plans to develop a new container facility within the Harwich Haven Ports area which includes Felixstowe, Britain's largest container terminal.

When completed, the Bathside Bay terminal will provide 500 additional jobs at the port.

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Hong Kong's Hutchison Whampoa group to bid for Mumbai port project - report
3 January 2006


HONG KONG (AFX) - The port development arm of Hutchison Whampoa Ltd, Hutchison Port Holdings, and partners are one of the three groups bidding for a 260 mln usd port project in Mumbai, the South China Morning Post reported, citing a senior executive of Hutchison.

The newspaper said Hutchison Port has teamed up with construction company Larsen Toubro to submit technical proposals last month, after the Indian prime minister's office instructed the Ministry of Shipping to allow bids from Chinese firms.

The Mumbai project entails the construction of three berths over two phases.

If Hutchison wins the Mumbai contract, it would be the company's first project in India and only its second in South Asia, the newspaper said.

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Hutchison in joint bid for Mumbai port - paper

HONG KONG, Jan 4 (Reuters) - A partnership of Hutchison Whampoa Ltd. and Indian construction firm Larsen and Toubro is one of the three groups bidding for Mumbai's US$260 million port project, the South China Morning Post said on Wednesday.

The pair are in the running after India last month reversed a Ministry of Defence decision taken in October to strike Hong Kong-based Hutchison from the list of eligible bidders on security grounds, the paper said. Taiwan's Evergreen Marine Corp. was also banned from bidding in October, the paper said.

If Hutchison wins, Mumbai will be the company's first project in India and its second in the south Asian region.

Hutchison Port Holdings (HPH), a unit of Hong Kong tycoon Li Ka-shing's Hutchison Whampoa, teamed up with Larsen and Toubra to submit technical proposals last month on the project after the ban was lifted, it said.

HPH would not comment on whether it was bidding for the project but said that it was never banned by the Indian government from bidding.

"HPH has never received any communications from the relevant authorities on the subject matter, thus we are not aware of any restrictions being placed on our possible port investements in India," the company said in a written reply.

Other bidders for the Mumbai port project included a partnership of India's United Liner Agency and the Port of Hamburg and a group led by Gammon India Ltd. , the paper said.

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Temasek tacking duel leaves Dubai's bid for P&O in doldrums
7 January 2006
South China Morning Post

Hong Kong's richest man must be watching with keen interest as Singapore and Dubai fight a phoney war over one of his most serious rivals in the global ports and container handling business.

For as Li Ka-shing's Hutchison Port Holdings contemplates its own expansion plans, secure in the knowledge that no change of ownership is currently on the cards, British ports and ferries group P&O is not so lucky.

Six weeks after P&O accepted a £3.3 billion ($44.2 billion) takeover offer from Dubai's DP World, Singapore's state investment arm Temasek Holdings continues to lurk in the shadows of the London stock market, making the outcome of the offer uncertain.

Temasek has played a puzzling game. Shortly following DP World's 443 pence a share offer, Temasek whipped up the waters by acquiring P&O stock at 460 pence a share through its subsidiary, the Port of Singapore Authority. It raised its stake to 4.1 per cent, far from sufficient to give it voting muscle on P&O's board, yet potentially enough to sink the Dubai offer.

What investor in their right mind, after all, would be ready to sell at Dubai's price if there was any likelihood that Singapore would make a rival bid?

If Singapore is still muddying the waters by the time of the extraordinary general meeting of P&O shareholders, there is a possibility the DP World offer could run aground.

With no firm indication from Temasek of its future intentions, the share price has been hovering at 462 pence.

Yet this week, the British Takeover Panel rebuffed P&O's demand to issue a "put up or shut up" order to Singapore. Such an order would compel Temasek either to make a firm offer by a set deadline or to commit itself to keeping its boarding parties off the British company's decks for the next six months.

But the panel said Singapore was not a declared "offeror" for P&O on the watchdog's disclosure table of potential bidders. So far, at the panel's behest, it has merely said it has made no statement, which would restrict it "from any course of action".

In other words, it has neither declared an intention of making an offer, nor ruled an offer out.

Of course, it is perfectly possible that Temasek has chosen to make a financial investment in P&O and that it has no other agenda, that it wishes only to make money as a minority shareholder in a company majority owned by DP World.

But if so, why not make its intention clear?

True, the share price would then drop to the level offered by Dubai, but at least Temasek would have the hope of sharing in the potential upside in future. However, it would also risk being squeezed out by DP World if Dubai accumulated sufficient shares to do so.

Alternatively, Temasek's "financial investment" may be rather for the shorter term, designed merely to force DP World into making a higher offer, which it can then accept and withdraw. But there remains that nagging doubt.

Could Singapore really be planning to make an offer of its own for P&O? It has the funds to do so and quite possibly the strategic interest.

Temasek itself is merely a financial investor, and claims to be independent of state control, despite the fact that its chief executive is married to Singapore Prime Minister Lee Hsien Loong. But it would certainly be a coup for the Port of Singapore Authority to become the owner of one of the largest global port operators.

Whoever wins will be well placed to benefit from growth in world trade, as China and India continue their headlong economic expansion. P&O operates in over 100 ports around the world and its new owner will be taking over a ready-made network.

Dubai's focus might be more on trade through the Middle East, while Singapore's might be more on trade between Asia and North America as well as with Europe. But either would be able to operate globally with P&O's infrastructure under its control.

And, with two weeks to go before P&O's extraordinary general meeting, there is still time for one side or the other to make a more generous offer than the one which is already on the table. No doubt Mr Li will already have placed his bets.

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Hutchison in talks for Zhanjiang Port stake
10 January 2006
South China Morning Post

Zhanjiang Port Holding has confirmed it is in talks with Hutchison Port Holdings about acquiring a stake in the southwest Pearl River Delta port company.

"Hutchison is in discussions with our parent company about the possibility of taking some equity interest in it," an official from Zhanjiang Port said yesterday.

While the company would not confirm the size of the acquisition being discussed, it is believed Hutchison wants to take a 40 per cent stake.

The company was 80 per cent owned by Zhanjiang Port, which was planning to float shares on the mainland, the company spokesman said.

Officials at Hutchison could not be reached for comment.

Following its investment in the Dalian iron ore terminal, announced in October last year, Hutchison would be further diversifying into the non-containerised terminal sector with an investment in Zhanjiang.

Hutchison currently has a 50-year, 2.2 billion yuan joint venture with Dalian.

The Zhanjiang government plans to invest 10 billion yuan in the mega-infrastructure project, including expansion of the Zhanjiang port's capacity to 100 million tonnes over the next five years.

Surrounded by the petrochemical plants established by the country's three largest oil companies, demand for oil transportation is likely to be robust in Zhanjiang.

Zhanjiang now has the country's biggest oil terminal, capable of handling 300,000 tonnes per year.

Hutchison last month sealed an agreement with the Shanghai International Port Group to invest in a 32 per cent stake in the mammoth Yangshan Port phase II project worth an estimated US$870 million.

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Felixstowe ‘approval’ to trigger ports review
By Janet Porter
13 January 2006
Lloyd's List

FELIXSTOWE’S expansion plans are expected to receive the go-ahead next week, clearing the way for the UK government to launch a ports policy review.

Transport Secretary Alistair Darling will set out the scope of the promised review as soon as the final planning application still awaiting consent has been completed.

Lloyd’s List understands that an announcement will be made in the next few days, with Hutchison’s proposals for a major development scheme at Felixstowe almost certain to be cleared.

That is the last of three deepsea port projects that the government had said it would consider before tackling strategic port issues.

Hutchison wants to expand capacity at Felixstowe by 1.5m teu a year, bringing annual throughput to 5.2m teu.

Just before Christmas, transport minister Derek Twigg granted conditional approval to Hutchison’s Bathside Bay development at Harwich where there are plans for a 1.7m teu facility.

Final approval is dependent on certain highway improvements. P&O Ports’ plans for a container terminal in the Thames estuary were also conditional on upgrading local infrastructure.

In a written statement to parliament a few days ago, Mr Darling said the government believes this expansion in deepsea container port capacity is justified by the economic benefits it will bring regionally and nationally.

He indicated at the time that the Felixstowe decision was imminent.

Port operators are divided on the merits of the government review, with many of the bigger ones opposed to any moves by the government to dictate where ports should be built. They argue that such decisions should be commercially, not politically, driven.

But PD Ports is fully behind the decision to hold a review and has said on many occasions that it would support greater central involvement in planning matters to ensure there could be no repeat of the hugely expensive and drawn out but unsuccessful Dibden Bay application.

The company also argues that the whole country would benefit from more port capacity in the north of the country, and that the government should help redress the balance by developing a national strategy.

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HWL Becomes Paratactic Biggest Shareholder of Huizhou Port

HUIZHOU, January 24, SinoCast -- Hong Kong conglomerate Hutchison Whampoa has recently been approved to own a 33.39% stake in Huizhou Port Affairs Group Co., Ltd., a state-owned port business operator in southern China's Huizhou city in Guangdong Province.

Thus, Hutchison Whampoa has become the largest shareholder of Huizhou Port paratactically with its formal biggest shareholder.

And three Hutchison Whampoa people have been elected to enter the board of directors of Huizhou Port.

Hutchison Whampoa will first engage in port construction in the early phase of their cooperation.

It will build two joint venture port terminals with a capacity of 50,000 tons, which are expected to finish and open for operation within two years.

At present, nearly 4,000 companies in Huizhou city have to export goods via ports in Shenzhen city, instead of the local Huizhou port in view of its limited capacity.

So the planned two terminals will be helpful for local exporters'convenient and cheaper transportation.

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Hutchison denies global ports alliance
By ROBERT WRIGHT
27 January 2006
Financial Times

The chief executive of Hutchison Ports Group has denied the company has a worldwide co-operation deal with Singapore's PSA, after claims that the alleged arrangement could affect the P&O takeover battle.

Speaking to the FT, John Meredith said a strategic alliance between Hutchison, the world's largest container port operator, and PSA applied only to the pair's operations in Hong Kong, the world's second-busiest container port. Elsewhere, the pair continued to compete fiercely. "There are areas where we're fighting like dogs," he said.

The relationship between Hutchison and state-owned PSA has become an issue in the takeover battle for P&O, the world's fourth-largest container port operator, after Dubai's DP World used sections of a press release issued last year to argue that the two had formed a worldwide strategic alliance.

The press release was issued after Hutchison, part of Li Ka-shing's Hutchison Whampoa conglomerate, sold 20 per cent of its key Hong Kong International Terminals (HIT) business to PSA.

DP World's advisers had argued that, because of the arrangement, the market shares of Hutchison, which is world number one, and PSA, which is world number three by capacity, should be looked at together in any competition investigations.

Mr Meredith said the deal in Hong Kong had been reached because Hong Kong's more expensive container terminals faced strong competition from lower-cost mainland China. It had been vital to ensure co-operation between the various operators in the port - which included PSA - to ensure prices were not cut unsustainably low. "(The PSA deal) helps us strategically here in Hong Kong," Mr Meredith said. "It has helped to stabilise the pricing. It has helped us to improve on the costs."

Within two months of the HIT deal, Mr Meredith said, the pair were competing in privatisation tenders for several Turkish ports, including Mersin, which PSA won. They were currently competing to win tenders in India.

It was common in the container ports industry for companies co-operating in one place to compete fiercely elsewhere, Mr Meredith said.

If PSA is successful in taking over P&O, it will become the world's largest container port operator by capacity, overtaking Hutchison. However, Mr Meredith was not worried about losing the title. "What we want to be is number one in making returns for stakeholders."

He also denied Hutchison's failure to enter the Indian container market was because the Indian authorities had barred it over its alleged ties with the mainland Chinese authorities. "We have never received any document or statement or indication from India that we cannot get involved in bidding (for port concessions)."