CSX World Terminals (CSX) has increased its stake in Asia Container Terminals (ACT), the major stakeholder in the development of Hong Kong's six-berth Container Terminal 9 (CT9) project, which is scheduled to start coming on line in May. CSX's Hong Kong-listed subsidiary, CSX World Terminals Hong Kong, has acquired HK$242.3 million of convertible shares from a majority-owned subsidiary of New World Infrastructure, one of CSX's partners in ACT, effectively increasing its stake in ACT to 29.5 per cent from 10 per cent. 'This is very positive move for our company,' said William McHugh, chairman of CSX (Asia). 'This transaction allows us to have greater equity in an exciting business venture and demonstrates our commitment to Hong Kong and Asia in general.' The forward-looking move comes at a time when throughput at Kwai Chung is showing an overall decline for the first time since onset of containerisation. Containerised trade handled by the port's four main operators, which control more than 90 per cent of overall throughput, fell an annualised 2.9 per cent in the first nine months, to 8.43 million teus (20 foot equivalent units). 'You have to look at the future and we are very confident in the future of Hong Kong,' said Alan Lee, managing director of CSX World Terminals Hong Kong. 'We believe, with China's accession to the WTO, this is a good investment. South China and Hong Kong are a trade circle and, if you believe that China's GDP will grow at 7 per cent a year, you have to think this area will grow by at least 10 per cent.' This year the South China area will move about 21 million teu, three million of which will go through mainland ports. At Mr Lee's estimate of at least 10 per cent annual growth, which is supported by the fact that 40 per cent of China's exports are generated in the region, more than two million more boxes a year would need to be handled. South China ports handle about 17 per cent of the area's overall volume, but they have been steadily increasing their market share. Even if they were to capture 40 per cent of the extra volume, it would still leave 1.2 million more teu a year for Hong Kong, about what CSX handles at CT3. 'People are too pessimistic when they talk about Hong Kong's throughput moving to South China ports,' said Mr Lee.'Sure, some of what will happen, but when you look at China's potential to produce goods and its GDP forecast, people should be more positive.' Once the third and fourth berths at CT9 come on line, ACT will switch from CT9 developer to owner-operator of the two berths at CT8 West, presently run by Wharf Holding's subsidiary Modern Terminals. Berth three at CT9 is scheduled to be operational by the end of 2003, and berth four by early 2004, when ACT will be fully operational at CT8 West, which Mr Lee says will allow for greater operational efficiency than CSX's CT3 facility, which had handled 922,608 teus to October. CT8 West's two berths provide 740 metres of quay space, which will give CSX's mangers, who will be operating the ACT facility, 20 metres more per berth. 'At CT3, it has always been a challenge servicing the bigger vessels. This will not be a factor at ACT,' Mr Lee said. 'CT8 West also does not have a big building on top of the terminal, which means we will be able to stack the containers as high as we need to. The ACT facility will operate even more sufficiently than we operated at CT3.'