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Rapid expansion of port cities

2009-08-27 08:44 BJT

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The container shipping business in China has been booming over the past several years. Many costal cities are increasing their number of marine terminals. But analysts are concerned that the expansion will not be able to match market demand.

A large number of ports are being developed along China's Yangtze River. There are many small and medium sized ports between the Port of Nanjing and the Port of Shanghai. This has increased competition along the river, and left many new terminals un-used.

Lv Tao, director of Jiangyin New Harbor Area Port Authority, said, "We have planned to construct 6 terminals for our port. We plan to build a 5th terminal, starting on September the 10th. Our annual throughput could reach 3.6 million containers in the future. Investment for the phase one could total 200 million yuan."

The current capability of Jiangyin New Harbor Port is only 600,000 standard containers. Due to the increasing number of operations, other port terminals in China are also suffering financial difficulties.

Shenzhen Da Chan Bay Terminal, a container port, is almost complete. It has a four-phase development plan. Its annual throughput target is 10 million standard containers. But during the first quarter this year, the number was only 300,000. Construction for the second phase of the terminal has been put on hold.

Andrew Miliken, CEO of Shenzhen DA Chan Bay Terminal 1, said, "It's could take years to collect ..... or even make profit."

The return on such an investment usually takes a long time. This makes it difficult for many small marine terminals, and many have turned to the government for financial support.

Lv said, "The government invested heavily during the initial stage. And that money compensated the losses in the beginning. Jiangyin is not the only place that is suffering. Many regions have launched various measures to help port operators. "

Many cities are trying to become marine cities to improve local economic growth. But construction could take decades to return a profit, and some ports are becoming a financial burden.