Dubai-led company to build India government project for $78m
The Free Trade Warehousing Zone project is expected to boost PM Modi's 'Make in India' campaign
A joint venture comprising Dubai ports operator DP World and Government of India-backed National Investment and Infrastructure Fund (NIIF), named Hindustan Infralog (HIPL), has won a contract to develop and operate a project that is expected to boost Prime Minister Narendra Modi’s ‘Make in India’ campaign.
HIPL will work on the Free Trade Warehousing Zone (FTWZ) project within Jawaharlal Nehru Port Trust (JNPT) – India’s largest container gateway – in Navi Mumbai, Maharashtra. The project will be developed for $78m (AED286.5m) and is due to be operational by 2020.
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Nitin Gadkari, India’s Minister of Road Transport and Highways, handed a letter of award for the project to Rizwan Soomar, chief executive officer (CEO) and managing director of DP World Subcontinent, and Kevin D’souza, director of commercial and business development at the same business.
HIPL is respectively a 65:35 venture of the Emirati and Indian organisations, and was created as an investment vehicle to invest up to $3bn (AED11bn) in ports, logistics, and related sectors.
Its work on FTWZ is accompanied by a long-term concession agreement of 60 years, and will be developed across 18ha of JNPT’s special economic zone.
JNPT handles five million twenty-foot equivalent unit (TEU) per annum, accounting for 33% of India’s total container traffic. FTWZ will be located close to the port, as well as the under-development Navi Mumbai International Airport and freight corridor, paving the way for it to capitalise on global and domestic markets.
This project marks HIPL’s second investment, and follows its acquisition of a 90% stake in logistics company Continental Warehousing Corporation (Nhaya Sheva) Ltd.
Commenting on the development, Sultan Ahmed Bin Sulayem, group chairman and CEO of DP World, said: “DP World has a proven track-record in developing trade-zones and HIPL will aim to leverage on our global expertise to build out this much needed-capacity to support India’s fast-growing export-import trade.
“Furthermore, this asset strongly complements our port terminals in JNPT and our newly acquired inland Continental Warehousing Corporation business.
“This investment is consistent with DP World’s strategy of extending its core business into other port-related, maritime, transportation, and logistics sectors with the objective of diversifying revenues and enhancing returns,” Bin Sulayem added.
NIIF is India’s sovereign wealth fund, and has strong relationships with the UAE’s investment agencies. In October 2017, a $1bn (AED3.67bn) investment agreement was signed between NIIF and Abu Dhabi Investment Authority’s (ADIA) wholly owned subsidiary. The partnership agreement made ADIA the first institutional investor in NIIF’s Master Fund, as well as a shareholder in NIIF’s investment management company, National Investment and Infrastructure Limited.
In May last year, DP World and NIIF signed a memorandum of understanding to develop projects within India’s logistics sector. The agreement followed a February 2016 visit to India by HH Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces of the UAE, and DP World’s Bin Sulayem.
At the time, Bin Sulayem said the deal would further Modi’s ‘Make in India’ and ‘Invest India’ campaigns “by encouraging foreign direct investment (FDI) and funding for landmark projects like Sagarmala and Bharatmala”.