In a disclosure to the Philippine Stock Exchange, the Enrique Razon-led port operator said its subsidiaries ICTSI Ltd and ICTS (India) Pte Ltd and L&T Shipbuilding Ltd (LTSB) have signed a termination agreement cancelling the container port agreement for the management and operation of the Kattupalli Container Terminal (KCT) in Tamil Nadu, India.
"The marketing and regulatory management were the responsibilities of our landlord as were many of the sourcing and procurement activities. This limited our ability to add the value required to make a real impact to the terminal's success. Following careful consideration, we amicably agreed to rescind the management contract and return all un-accreted economics," ICTSI vice president for finance and treasurer Rafael J. Consing Jr. said in a text message.
LTSB is a joint venture between Larsen & Toubro Ltd (L&T) and Tamil Nadu Industrial Development Corp (TIDCO).
"The mutual decision for the contract cancellation came after lengthy discussions and thorough consideration by both ICTSI and LTSB. Both concluded that the existing contract is not beneficial to either party in its current form," ICTSI said.
"For its part, ICTSI deems the cancellation of the Kattupalli contract in keeping with the ICTSI Group’s overall strategy of moving away from contracts that isolate ICTSI from the facility’s day to day operations, including regulatory and commercial activities," the port operator said, adding that it will be reimbursed for the license fee it paid to operate the terminal.
ICTSI said the contract cancellation has no effect or influence on any of its other operations.
"The group will continue to actively search for opportunities in India," it said.
Last May, ICTSI bagged a 26-year contract to construct and operate a container terminal in Melbourne, Australia.
In April, ICTSI's wholly owned subsidiary, ICTSI (ME) JLT, signed a contract with General Company for Ports of Iraq (GCPI) to operate, develop and expand container facilities at the Port of Umm Qasr.
ICTSI last year earned $172.4 million, up from $143.2 million the previous year. It operates ports in Manila, other parts of Asia, the Americas, Europe and Africa.
- Interaksyon
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