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Newly formed Hong Kong Seaport Alliance under scrutiny

THE Hong Kong Competition Commission is to investigate the newly formed Hong Kong Seaport Alliance between four of the container terminal operators in which they would jointly operate and manage 23 of the 24 berths at the port

Newly formed Hong Kong Seaport Alliance under scrutiny

THE Hong Kong Competition Commission is to investigate the newly formed Hong Kong Seaport Alliance between four of the container terminal operators in which they would jointly operate and manage 23 of the 24 berths at the port

11 January 2019 - 19:00

THE Hong Kong Competition Commission is to investigate the newly formed Hong Kong Seaport Alliance between four of the container terminal operators in which they would jointly operate and manage 23 of the 24 berths at the port.

The city's competition commission says it's investigating whether The Seaport Alliance contravenes antitrust laws by preventing, restricting or distorting competition. It said the probe is a matter of priority.



The Allinace members are Hongkong International Terminals Limited, Modern Terminals Limited, Cosco-HIT Terminals (Hong Kong) Limited, and Asia Container Terminals Limited. Between them, they would hold a 95 per cent market share at the port; Dubai Ports International, which operates one berth, is not participating in the Alliance.



Managing director of Hongkong International Terminals Limited, Gerry Lim, earlier said: 'The formation of The Seaport Alliance will further enhance efficiencies, increase utilisation and improve our overall service offering to customers.



'The Seaport Alliance will ensure that the Port of Hong Kong remains a valuable contributor to our economy, both as an employer and as a facilitator of global trade.'



He pointed out that the collaboration is in direct response to a rapidly changing business environment, including the formation of new carrier alliances, carrier industry consolidation, and the dramatic increase in vessel size over the last few years.



Industry members have expressed grave concerns over potential cartel behaviour hurting trade further at a time when Hong Kong's container port business was struggling in the face of competition from across the border.



They noted that the operators in the alliance were not harmed by this trend, as they were already running terminals in mainland China at ports in Yantian, in Shenzhen, and Huizhou in eastern Guangdong province, reports SCMP.



Chairman of the Lok Ma Chau-Hong Kong Freight Association, Stanley Chiang Chi-wai, told the SCMP that the Alliance was a step backwards. He warns that the Alliance could squeeze Dubai Ports out and that business might be diverted to mainland ports if shipping companies found Hong Kong too expensive because of cartel-like behaviour.



The container terminal has the capacity to handle the equivalent of 21 million TEU a year. It handled the 16.2 TEU in 2017, according to the Hong Kong Container Terminal Operators Association.


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