DP World has found itself in a controversial position regarding contracts for container terminal concessions at India’s Nhava Sheva port, according to local trade sources.
The Dubai-based operator has two terminal entities at the port: Nhava Sheva International Container Terminal (NSICT), which opened in 1997; and Nhava Sheva India Gateway Terminal (NSIGT), which began operations in 2015.
According to sources, the company has been pooling harbour resources to “overperform” at NSIGT, in an attempt to minimise the burden of higher royalty charges applicable for NSICT, an industrywide problem rooted in the 2005 government tariff policy for older build-operate-transfer (BOT) projects across landlord ports.
Simply put, that meant a concessionaire was required to share extra revenue, accrued from volumes handled beyond the terminal’s minimum performance commitment, with the landlord port.
NSIGT has a 330-metre wharf and an 800,000 teu annual capacity. Sources claim DP World regularly berths ultra-large container vessels (ULCVs) of 350 metres or even longer by using the terminal’s infrastructure, including quay cranes, “tactically”.
One rival terminal source said: “MSC vessels have lengths ranging between 350 and 370 metres. How do they get accommodated and serviced at a terminal that has lower capabilities?
The source cited the example of the 367-metre MSC Roma, one of the largest containerships ever to have anchored at Nhava Sheva, and data shows CMA CGM and Cosco have also had ULCV dockings at NSIGT.
“Our estimates are that NSIGT saw some 200 calls by containerships in the 330m-plus category last year,” the source added.
PSA International and APM Terminals have high stakes in Nhava Sheva, via Bharat Mumbai Container Terminals (BMCT) and Gateway Terminals India (GTI) respectively, making the port environment intensely competitive.
While declining to comment on record, PSA and APMT sources at Nhava Sheva have questioned DP World’s terminal integration management, claiming: “This ongoing operational rejigging or adjustment is a breach of the concession contract, as both NSICT and NSIGT have tariffs structured differently.
“Quay cranes are also being repositioned for this purpose.”
NSIGT has handled 1m teu from April through February in the current fiscal year (2024-25), against the 800,000 teu it was designed for. On the other hand, NSICT handled 1.1m teu against a 1.2m teu capacity, data shows.
The NSICT concession is due to end in 2027, with currently no indications on the re-awarding of concession rights. But it is believed DP World will be keen to secure an extension to keep its operations moving in tandem with larger vessel call demands.
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