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CompaniesNehal Chaliawala
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28 Feb 2025, 10:12 PM
ISTAlbert Maersk, named so in Mumbai on Friday, is part of a series of 18 large dual-fuel methanol vessels scheduled for delivery in 2024 and 2025.Nearly 80% of this investment is contingent upon two factors – an extension of Maersk’s concession for operating the Pipavav port and it winning a competitive bid to develop a terminal at the upcoming Vadhavan port. Maersk will also invest in developing ‘landside’ infrastructure in India.
Mumbai: A.P. Moller-Maersk has offered to invest up to $5 billion in India to expand its local operations, but about $2 billion of this is contingent upon the shipping and logistics major getting an extension of its 30-year concession for the Pipavav port in Gujarat that expires in September 2028.
A similarly large chunk of the proposed $5 billion investment is contingent upon the company winning a bid to develop a container terminal at the upcoming Vadhavan Port near Mumbai.
The company did not disclose the timeline over which this capital will be invested.
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The investment in Pipavav is proposed to go towards expanding the capacity of the port by increasing its draft—the depth of the waters—so that it can handle larger sea vessels, and to build new berths and bigger yards, so that it can handle more cargo.
But the investment will only happen if the Gujarat government extends the concession given to Gujarat Pipavav Port Ltd, the listed company that operates the port.
“We will have to get a certainty of whether we will stay or not, because the paybacks of these will be measured in decades,” said Keith Svendsen, chief executive officer (CEO) of APM Terminals, an independent unit of Maersk. It owns a 44.01% stake in the listed company which has a market capitalization of just over ₹6,000 crore.
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The company has been negotiating with the Gujarat government for an extension of its concession for a long time, Svendsen said, adding that the company is confident of receiving one.
“We actually invested 100 million two years ago in an LPG facility (at Pipavav), which you could say is a bit of a risk, given we don’t know whether we stay. So that will tell you something about our confidence,” he said on Friday.
However, in case the company does not receive an extension in its concession, it puts at risk the future of the listed company Gujarat Pipavav Port Ltd.
“If the [concession] is not continuing, then there’s no company. But we want to continue to invest. And if you judge by the shareholders of the company, it seems that they have confidence that that (extension of concession) will happen,” Svendsen said.
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