Malaysian firm in US$2b Kerala port project

Malaysian firm in US$2b Kerala port project
By Kamarul Yunus
Published: 2008/10/20
BTimes

Pembinaan Redzai, which has some 40 per cent stake in Westports Holdings, will develop an international container transshipment hub with India's Lanco group

A CONSORTIUM comprising India's Lanco Group of Companies and Malaysia's Pembinaan Redzai Sdn Bhd has secured a US$2 billion (RM7 billion) deal to develop the Vizhinjam International Transshipment Terminal Port in India.Last month, the Kerala state government issued a Letter of Intent to Lanco, and the licence agreement for the project is expected to be signed next month.In a statement, Lanco said the licence agreement will be signed between the Kerala state government and the Special Purpose Company (SPC) to be incorporated by the Lanco-Pembinaan Redzai consortium members.The Kerala state government will hold a 24 per cent equity stake in the SPC, while the balance equity will be held by the consortium.

Lanco said the port project was awarded to the consortium of Lanco and Pembinaan Redzai after the Indian government formally granted the security clearance to the consortium earlier last month.Pembinaan Redzai owns some 40 per cent stake in Westports Holdings Sdn Bhd, the holding company for Westports Malaysia Sdn Bhd that runs Westports at Port Klang.

The Vizhinjam port project involves the development of an international container transshipment port. The port was put on tender by the Kerala state government in August last year. In February this year, Pembinaan Redzai teamed up with Lanco to submit a bid for the port project, along with four other consortium bidders.The project is envisaged to be developed in four phases, with an ultimate capacity of 6.5 million TEUs (20-foot equivalent units). The port will be equipped with state-of-the-art technology, equipment and highest industry service standards.Lanco said the project has distinct advantages of being a transshipment hub, given its 15-18 metre natural draft and proximity to international sea routes.Lanco will commence preparation of a detailed project report and start the process of obtaining clearances for the project and financial closure, which is expected to take about 12 to 18 months.The construction activities will start thereafter in order to commence commercial operations of Phase 1 by end of 2012.The port, when developed, will attract a major share of the container transshipment traffic of India from the ports of neighbouring countries like Sri Lanka, Malaysia, Saudi Arabia and Singapore."Indian companies engaged in exports and imports will save substantial foreign exchange outflow, time, risks and transshipment costs at foreign ports," Lanco said.