GUANGDONG International Trust and Investment Corp (GITIC) plans to invest 200 million yuan (about HK$185.86 million) on developing the facilities at Huizhou port in Guangdong province. The deputy general manager at the construction management department of Quanwan Industrial United, Liu Fuqiang, said GITIC had signed a letter of intent to improve facilities at the first phase of the port's development. Quanwan Industrial United would pour 200 million yuan into the project. The company was established by Quanwan Industrial, owned by the Huizhou municipal government, and China Everbright International Trust and Investment, with responsibilities for the development, construction, operation and management of the port and the Quanwan Combined Harbour Zone. The GITIC project, which will include deepening the port and putting in more machinery, is expected to take six months to complete. Under the first phase of the port development, two berths have become operational in 1992. Mr Liu said the port business was at a low ebb because of the tight credit policy introduced by the central government. In the first half of the year, the port handled 150,000 tonnes of goods, down 57 per cent from the 350,000 tonnes handled in the same period last year. This was attributed to a fall in transport of steel products, cement and food. Mr Liu expected to handle 500,000 tonnes of cargo this year, compared with 760,000 tonnes last year and 690,000 tonnes in 1993, when the port was first opened to foreign vessels. Uncertainty surrounding the port business had affected foreign investment in Huizhou, he said. Quanwan Industrial United's plan to develop the port in co-operation with Hong Kong companies such as Modern Terminals and Wah Kwong Shipping was affected by the slump in business. The plan envisaged the building of a container port at Huizhou with three berths for 50,000-deadweight tonne vessels. 'Each berth requires an investment of about 500 million yuan. Now, with few sources of cargo, there would be some difficulties in achieving good returns,' Mr Liu said. In light of the difficulty, the three parties involved are considering developing facilities for short-term transport needs before going into full scale. Mr Liu said another difficulty Huizhou faced was competition from other ports such as Yantian and Shantou, but he was adamant the decision to build the port was right. 'Southern China needs a deepwater port,' Mr Liu said. 'Huizhou needs the port because of the demand from industries in the hinterland, such as car, petrochemical and processing industries.' The slow business would improve with the expected relaxation of the central government's macroeconomic controls, as well as the local government's effort in encouraging more foreign investment in industries that would make use of the port's facilities, he said.