A joint venture with a state-owned firm will finance Qianwan phase III at northern China's busiest container port The Qingdao Port Authority will seal an agreement with three major port operators next week on a multi-billion-dollar project to build and operate 11 berths at the port of Qingdao, in Shandong province. The joint venture, which partners P&O Ports, AP Moller, Hong Kong-listed Cosco Pacific and the state-owned Qingdao Port Group, will finance the Qianwan Phase III project, which includes 3,000 metres of shoreline for container berth development. 'The joint-venture deal will be signed in Beijing next week when the British Prime Minister Tony Blair makes an official visit to the capital city,' a Qingdao maritime executive said. Under the agreement, Cosco and AP Moller Terminals will invest in the Qingdao Qianwan Container Terminal firm (QQCT), owned by P&O and Qingdao Port, which operate three berths at Qianwan. Five separate berths managed by Qingdao Port will be merged into QQCT's operational remit and will be run by the new joint venture before the end of the year. QQCT now operates about 770 metres of waterfront, while the port authority manages 1,400 metres, leaving a little more than 800 metres for development. 'Three new berths will be built and they will be operational by 2006,' the executive said. The total investment has not been disclosed but Cosco management has said it would spend about US$150 million for 'more than 20 per cent' of the venture. Qingdao port has been the busiest container facility in northern China since 1997. Cargo throughput in the first half reached 2.08 million teu (20-ft equivalent units), up a comparative 29.5 per cent. 'We are seeing very consistent growth in the first six months. The impact of Sars was minimal,' the executive said. 'Maersk Sealand will begin a service to the Mediterranean and northern Europe this Sunday. It's the first time it has launched a long-haul service from Qingdao.' According to Maersk sources in Beijing, it will be the first direct service to Europe the world's No 1 box carrier has launched from the Bohai Rim region, which includes the international ports at Tianjin and Dalian. Qingdao is expected to handle four million boxes this year. The annual capacity of its eight operational berths is about 4.8 million teu. Tianjin port, with Beijing - the epicentre of the Sars outbreak - as its catchment area, also reported strong growth in the first six months. It handled 1.46 million boxes, up 25.9 per cent year on year, but down on its 30.4 per cent growth rate of the first quarter. 'It is not a good result. I think Tianjin was the most affected by Sars of the northern ports. Not only did demand slow, but many truck drivers refused to pick up cargo from Beijing when the Sars outbreak peaked,' a spokesman for the Tianjin Port Authority said. 'The impact of Sars will probably become more obvious this quarter. 'Although there won't be a drop in volume, the comparative growth rate will be disappointing.' The route adjustment by the shipping lines also had a negative impact on the port business, which saw the slow season extended from May to this month. 'Preliminary figures this month show we only have marginal growth in cargo volume. I think things will get better in September, with better routings, stronger recovery and, most importantly, the absence of Sars,' he said. China Merchants, China Shipping Development, CSX World Terminals and Cosco Pacific are looking at investing in four berths in Tianjin, which will be operational by the year-end, according to sources at China Merchants. The deal will be finalised within three months, according to Timothy Shen Ka-yip, deputy general manager of China Merchants, which will take a 14 per cent stake. 'Some complications on the land-use rights need to be sorted out,' Mr Shen said. Dalian port, the smallest port of the big three in the north, reported a 25 per cent year-on-year growth in container throughput in the first half, or 730,000 boxes. 'Sars had only a small impact on throughput in the first half, perhaps 1 per cent,' a spokesman for the Dalian Port Authority said.