COSCO has announced that CSPL SPV, a wholly-owned subsidiary of COSCO Shipping Ports, entered into a concession agreement with Abu Dhabi Ports (AD Ports) in connection with the construction, management and operation of the Khalifa Port Container Terminal 2 (KPCT2) in the UAE.
The concession agreement lasts for 35 years, with an option to extend the term for a further 5 years, and is estimated by COSCO to have a present value of approximately $738m.
The two companies will establish a joint venture, with CSPL SPV being entitled to 90% of the voting rights attached to the shares of the joint venture company, and AD Ports entitled to the remaining 10%.
KPCT2 will be the second overseas terminal in which COSCO Shipping Ports holds a controlling interest. The investment is expected to strengthen the company’s growth and COSCO aims to develop KPCT2 so that it is regarded as a “hub of the upper Persian Gulf region”.
The KPCT2 port is located at Khalifa Port, UAE, along the ‘Silk Road Economic Belt’, and is strategically situated between Abu Dhabi and Dubai, with good inland connections. It has a draft depth of up to 18 m (with a channel depth of 16.5 m) and a quay length of up to 1,200 m. The first 800 m of the quay length is expected to commence operations in 2018, with the latter 400 m expected to commence operations in 2020 following expansion works. Once expanded, the total concession area will span an area of approximately 70 ha with three berths and an annual handling capacity of 2.4m TEUs.
The agreement also includes an option for a further 600 m of quay length in the future to allow for anticipated volume growth, which would increase the nominal annual handling capacity of KPCT2 to 3.5m TEUs. This option could be taken up in the event that the throughput of KPCT2 reaches or exceeds 70% of the annual 2.4m TEU capacity.