Shanghai Daily news

The state-owned port operator in Shanghai and its listed arm will jointly set up a 5-billion-yuan (US$602 million) company to operate the first phase of a mega deepwater port under construction.
Shanghai International Port (Group) Co Ltd, the largest port operator in the city, will invest 2.45 billion yuan to take a 49 percent stake in the new venture Shanghai Yangshan International Container Wharf Co Ltd.
Shanghai Port Container Co Ltd, the group's subsidiary listed on the Shanghai stock market, will hold the remaining 51 percent with an investment of 2.55 billion yuan.
"The investment will be made in the form of the company's own capital together with bank loans," said Wu Ying, the board secretary with Shanghai Port Container.
She didn't give the proportion.
If all the investment is made through bank loans, the company's debt ratio will increase to 44.17 percent, still within a reasonable range, said the company in a statement.
The new venture will operate the first five berths at Yangshan Deepwater Port, which are expected to be put into service by the end of next year with a 3 million TEUs (twenty-foot equivalent unit) of container annual capacity.
Shanghai is building the Yangshan Deepwater Port on an island 27 kilometers away from the city, where water depth of more than 15 meters will enable the city to receive big container ships.
The port will eventually be able to handle more than 20 million TEUs of containers.
Ma Ying, an industry analyst with Haitong Securities Co Ltd, said the new venture will be a major growth engine for Shanghai Port Container.
"The company's existing facilities like those in Baoshan District provide little room for future growth. The project will be a main growth engine for the listed operator," said Ma.
Meanwhile, the two companies are in discussion with Shanghai Tongsheng Investment (Group) Co Ltd, a government-backed company in charge of building the Yangshan port, about the price of taking over the first phase, said a Tongsheng official Sun Wei.
A number of overseas investors like Singapore's PSA International and Hutchison Whampoa also are keen on investing in the port.
"But we have no plans to attract foreign capital at the moment," said Wu with Shanghai Port Container.
Last year, Shanghai overtook South Korea's Busan to become the world's third-largest city in terms of container volume.
It handled 11.28 million TEUs of containers, rising 28 percent from a year earlier, trailing Hong Kong, which handled around 20 million containers and Singapore, with 18.1 million TEUs.
The statement by Shanghai Port Container yesterday estimated that the city will see a container throughput of 20 million TEUs by 2007 and 25 million TEUs by 2010.
Shanghai urgently needs a deepwater port because its existing facilities are lagging behind the exploding trade growth.