Analysts doubt the plan to counter the US$18b Yangshan facility is viable Officials from Zhejiang province recently unveiled an ambitious blueprint for a mega-port development on their shores, indicating they will not sit by as Shanghai's new US$18 billion Yangshan port steals the headlines. Instead of selling Ningbo port as a 'support facility' for Shanghai - an official line widely heard two months ago - officials this week invited Hong Kong investors to develop 14.5km of shoreline on Jintang island, Zhoushan. The project has yet to be approved by the central government. The development, which would be under Ningbo Port Authority, can potentially house more than 30 berths, or 15 million boxes a year. 'Although Jintang is located in Zhoushan, it will be administered by the Ningbo Port Authority,' said Huang Yong, deputy director of the Zhejiang Provincial Development Planning Commission, on the sidelines of an investment forum organised by provincial authorities. 'We plan to link up the island with Ningbo and Zhoushan by bridges; some of the smaller ones are being built,' he said. Zhejiang is the country's fourth-largest exporting province, with outgoing goods reaching US$33.54 billion in the first 10 months, up a comparative 41 per cent. Ningbo port, which handled 2.75 million teu (20-ft equivalent units) last year, boasted the largest year-on-year growth in throughput - 49 per cent. Industry experts also say it is the most natural deep-water port on the mainland north of Yantian. Economists say competition among ports at the mouth of the Yangtze River is inevitable, despite there being enough exports for all. 'The region's port development is in line with demand for transportation services fuelled by strong exports. But there will be regional competition,' said Jun Ma, an economist with Deutsche Bank. Still, a multitude of regional container port developments would appear to cast doubt on the viability of the Jintang project. Although planning officials expect Ningbo's annual container throughput to surge to eight million teu by 2010, analysts say existing projects will satisfy demand. Nine berths are expected to enter service this year with completion of Beilun Port phases III and IV, boosting annual handling capacity by at least 4.5 million boxes. China Merchant Holdings' (International) four-berth project on Daxie Island - known as phase V - will increase annual capacity by a further two million boxes. Any Jintang development will be in direct competition with the central government's port-development jewel, Shanghai's Yangshan port, also in Zhoushan. The first phase of Yangshan, which includes five berths, is to be completed in 2006. One analyst was sceptical about the Jintang project, saying it reveals the extent of the rivalry. 'It's an unhealthy development,' said the analyst. 'The central government made it clear that Shanghai will be the major international hub in the region, but it seems Ningbo is horsing around.' 'I doubt whether the central government will approve the project. It will be a waste of money, given the ample container handling capacity in the region.' The Hong Kong-based investment arm of Ningbo municipal government, Ning Shing Holdings, has committed to the initial phase of the so far wholly state-funded Jintang project. It agreed to take 25 per cent in the US$600 million Jintang Dapukou Container Terminal. The Ningbo Port Authority and Zhoushan Port Investment will take 65 per cent and 10 per cent respectively. Ning Shing refused to disclose details of its funding. Mr Huang said Hong Kong-listed Cosco Pacific showed an initial interest in Jintang. The company declined to comment. David Li Yi, managing director of China Merchants, said the company was examining the investment potential of Jintang, adding that shareholder interests would be a key concern.