Busan buys DP World berths, seeks new operator
The Busan Port Authority this week said it has officially purchased three berths at its New Port development from Pusan Newport Co., a joint venture between terminal operator DP World and the Korean government.
BPA said it has been negotiating the sale of the berths for seven months. It’s the second phase of PNC’s terminal at the New Port and was originally due to open early this year. The purchase price was nearly $400 million for the 1.5 million-TEU-capacity facility and includes nine quay cranes and the container yard.
The authority said it would call for bids to operate the new terminal on Aug. 10 and decide a new operator by Aug. 12.
Busan, like most major ports in Asia, has struggled with a crippling downturn in volume. Through June, the port saw volume decline 17.8 percent to 5.6 million TEUs. The New Port development, some 25 kilometers west of the older port, saw first half volume 41.3 percent to 1.08 million TEUs. But much of that growth came from less lucrative transshipment volume, which grew 67.1 percent to 533,000 TEUs. Import/export cargo at the New Port rose 22.1 percent to 547,000 TEUs.
Some of the volume gains at the New Port can be attributed to the intended migration of services away from terminals in the old port. The New Port was designed to eventually handle all of Busan's container volume. Also, Korean carrier Hanjin Shipping has opened its own new terminal at the New Port, and compatriot carrier Hyundai Merchant Marine will do so in early January. That's intensified competition at the New Port.
Reports circulated in early July about the deal, but the port authority didn’t formally announce the purchase until Monday.
A request for comment from DP World was not yet returned.