Hutchison to open second Pakistan terminal by October
Hutchison Port Holdings (HPH) expects to open a second container terminal in Pakistan by October, increasing the country's container-handling capacity by more than half as competition looms from deepsea transhipment hubs under construction in India.
The new terminal at the Port of Karachi, which handles about 60% of Pakistan’s seaborne cargo volumes, will have an alongside depth of 16 m and is expected to handle up to 2 million teu by 2021, the company told financial newswire Bloomberg.
The terminal was originally planned to open in 2011, but the project was hit by multiple delays, mainly over dredging and the construction of hinterland access roads.
The terminal is expected to support the development of transhipment hub operations out of Pakistan in competition with Indian hubs planned for Enayam near Colachel in Tamil Nadu and Vizhinjam in Kerala, as well as Dubai’s Jebel Ali.
Pakistan's container throughput totals about 2.5 million teu per annum. More than 1 million teu is currently handled by HPH’s Karachi International Container Terminal (KICT), which started operating in 1998.
KICT in April welcomed the largest vessel yet received at the Port of Karachi, the 340 m-long, 8,600 teu-capacity Hyundai Brave.
With the new terminal, HPH is hoping to benefit from a period of economic growth in Pakistan. The government expects GDP to expand by 7% in 2017 as the country exits an International Monetary Fund loan programme and receives heavy investment from China as part of its 'One Belt, One Road' (OBOR) initiative.
The China-Pakistan Economic Corridor (CPEC) is an important artery in the OBOR vision. The Chinese government has committed to investing USD45 billion in CPEC projects through 2027, amounting to Pakistan’s largest ever package of foreign direct investment.
The three major ports at Karachi, Gwadar, and Qasim are being developed as part of the CPEC. Planned road and rail projects include constructing a road linking Karachi and Lahore and upgrading the Karakoram Highway. Heavy investment is also expected in energy projects.
HPH is the world’s largest container terminal operator, accounting for about 10% of the revenues of Hong Kong billionaire Li Ka Shing’s CK Hutchison Holdings. But global trade's slowing growth and weak liner profitability are putting pressure on the business.
Throughput at MPH's Singapore-listed arm, HPH Trust, which operators deepsea and river terminals in southern China, fell 7% year on year (y/y) in the first half, with volumes plunging at its Yantian unit and three Hong Kong-based terminals.
HPH Trust handled 10.79 million teu during January–June, with Yantian International Container Terminal (YICT) in Shenzhen contributing 5.46 million teu and the Hong Kong facilities – Hongkong International Terminals, COSCO-HIT, and ACT – providing 5.33 million. Revenue for the period slipped 6% y/y to USD731 million.
Although the operator’s first-half results improved on its first quarter, HPH Trust said its management remained cautious on volumes for the rest of the year, given the slack global trade outlook and expected fallout from Britain’s exit from the European Union.