SINGAPORE (Jan 9): The trustee-manager of Hutchison Port Holdings Trust (HPH Trust) says its subsidiaries have entered into an alliance agreement with a couple of other operators to better manage their container terminals in Kwai Tsing, New Territories, Hong Kong.
Hutchison Port Holdings Management says the objective of the alliance is to improve the value proposition of the combined terminal facilities in the face of growing regional competition; maximise efficiencies; optimise utilisation of the facilities and achieve cost savings.
Hongkong International Terminals (HIT), Modern Terminals (MTL), Cosco-HIT Terminals (Hong Kong) (CHT) and Asia Container Terminals (ACT) on Tuesday entered into the joint operating alliance agreement to collaborate with each other for the efficient management and operation of the 23 berths across Terminals 1, 2, 4, 5, 6, 7, 8 and 9 at Kwai Tsing.
HIT, which owns 12 berths in Terminals 4, 6, 7 and 9 North, is a wholly-owned subsidiary of HPH Trust. MTL, which owns seven berths in Terminals 1, 2, 5 and 9 South, is a subsidiary of The Wharf (Holdings). CHT, which owns two berths in Terminal 8 East, is effectively held as to 50% by each of Cosco Shipping Ports (CSPL) and HPH Trust through certain intermediary companies. ACT, which owns two berths in Terminal 8 West, is held 60% by CSPL and 40% by HPH Trust through certain intermediary companies.
Under the agreement, the parties will establish an executive committee, a joint management committee, a commercial committee, a finance committee and an operations coordination Team in order to govern and manage the combined terminal facilities.
The revenue and costs from the management and operation of the facilities of the combined terminal facilities will be shared among the parties at a pre-agreed ratio. The agreement may be terminated in certain circumstances upon the giving of not less than six months’ written notice.
Taking into account the formation of strategic alliances between shipping lines and the growing use by lines of larger vessels, Hutchison Port Holdings Management believes the alliance will enable better utilisation of the existing capacity by increasing the flexibility in the overall berth and yard planning among the 23 berths to better accommodate the need of such shipping alliances.
“This will result in an enhanced service for customers, thereby increasing the overall competitiveness of the combined terminal facilities,” adds the trustee-manager.
Units in HPH Trust closed 0.5 cent higher at 25 US cents on Tuesday.
