China Merchants Holdings (International) expects associate Shanghai International Port Group (SIPG) to be one of the companies chosen to build and operate the second phase of the 18 billion yuan Yangshan deepwater port development, according to group president Fu Yuning.
SIPG, which split Phase I with wholly owned Shanghai Port Containers, is up against industry giants such as Hutchison Whampoa and PSA International for the contract.
Mr Fu yesterday expressed confidence that SIPG, in which China Merchants has a 30 per cent stake, also would be chosen for Phase II.
'I think so. It would be a rational decision to have some kind of co-operative arrangement between Phases I and II. They are on the same island,' Mr Fu told the South China Morning Post yesterday. 'It would be possible for Phase I to stand alone, but it would be very difficult for Phase II to do so.'
The four-berth Phase II will be among the most expensive port developments on record, with construction costs - at US$205 million per berth - almost triple the norm, according to an executive involved in the bidding.
China Merchants saw interim earnings increase 39.57 per cent to $1.16 billion as the contribution from its core port division was boosted by higher box-handling rates across its mainland network.
Recurrent earnings were up 29 per cent after stripping away one-off gains from new accounting procedures and property revaluations.