ICTSI bags $508M deal to operate Aussie port

Model of the Webb Dock, where winning bidder ICTSI will operate Melbourne’s third international container terminal. PORTOFMELBOURNE.COM

MANILA, Philippines—International Container Terminal Services Inc. (ICTSI), a global ports operator owned by Filipino billionaire Enrique Razon Jr., on Friday won a 26-year expansion and operations contract for the Port of Melbourne, the largest container terminal in Australia.

ICTSI said in a stock exchange filing Friday that the project would require investments amounting to $508 million, mainly to develop the Webb Dock Container Terminal and Empty Container Park at the Port of Melbourne.

About 3,200 commercial ships call on the Port of Melbourne each year. The port also handles over 2.5 million TEUs (twenty-foot equivalent units) annually.

ICTSI, through subsidiary Victoria International Container Terminal Ltd., signed the contract with Port Melbourne Corp. for the design, construction, commissioning, operation, maintenance and financing of the terminal and empty container park at Webb Dock East. ICTSI holds 90 percent of Victoria International Container, with the remainder owned by Anglo Ports Pty Ltd.

With the signing, Victoria International Container will build and commission new terminals at berths Webb Dock East 4 and Webb Dock East 5. It will also design and build the new empty container park at Webb Dock East and operate the Terminal and Empty Container Park until June 2040.

ICTSI said Phase 1 of the terminal project, which could handle an estimated capacity of 350,000 TEUs, would start by the fourth quarter of this year and completed by December 2016. It added that phase 2 should be operational by December 2017.

Breaking down the planned investment, ICTSI said $407 million will go to the development of the Webb Dock Container Terminal and Container Park. It said another $101 million will be spent to increase the capacity of the terminal to 1.4 million TEUs.

ICTSI is now aggressively expanding operations overseas. Just this week, Greece’s Hellenic Republic Asset Development Fund said ICTSI was among six groups that had expressed interest in acquiring a 67-percent stake in Piraeus Port Authority SA.

ICTSI also recently announced a plan to invest an initial $130 million to modernize and expand a container port in Iraq.

ICTSI is allocating at least $310 million this year in capital spending mainly to grow new container terminals in Mexico and Argentina, and to start the development of the terminals in Honduras and the Democratic Republic of Congo. It spent $477.6 million last year.

ICTSI earlier reported a 20-percent increase in 2013 profit to $172.4 million, while revenues increased 17 percent to $852.4 million.—Miguel R. Camus