Shanghai port group to ease up on Yangtze plans

PUBLISHED : Wednesday, 22 June, 2011, 12:00am
UPDATED : Wednesday, 22 June, 2011, 12:00am


Shanghai International Port (Group) will slow its pace of investment in ports, terminals and related infrastructure along the Yangtze River after a massive spending boom in the past few years.

SIPG vice-president Yan Jun said the company had spent 8 billion yuan (HK$9.6 billion) developing a network of ports and container handling facilities along China's longest river.

He believes this capacity is sufficient to meet 'demand in the next two or three years'.

'Further development will be dependent on demand,' he said on the sidelines of a Journal of Commerce shipping conference yesterday.

The company, which is 44.2 per cent owned by the Shanghai municipal government and 26.5 per cent controlled by China Merchants International Terminals (Shanghai), merged 18 domestic maritime subsidiaries into a separate division a year ago. These included port and container terminal interests in Chongqing, Wuhan and Yibin.

Jon Monroe Consulting, which has studied shipping and port facilities on the Yangtze River, estimated total container handling capacity along the upper reaches of the Yangtze would grow from 1.9 million teu (20-foot equivalent units) in 2009 to seven million teu by 2015.

This followed the development of a raft of port expansion projects by companies such as SIPG. By comparison, the US-based research consultant estimated that even with the most optimistic forecasts actual throughput at these ports, including Chongqing and Yibin, would reach 2.2 million teu by 2015.

Yan could not comment on the impact of competition from rail lines on container volumes along the Yangtze River, saying it would depend on the speed of development of container rail transport. The priority now is on moving passengers and strategic commodities such as coal.

Yan also doubted whether international ports such as the Taicang International Container Terminal in Jiangsu province posed a serious threat to the firm's business in Shanghai because they focused on intra-Asian and regional trade.

Instead, he thought the company would see a rise in the volume of transshipment cargoes between river and ocean-going ships as central and western provinces developed.