CDC, which is in the process of being privatised, said its investment wouldbe in the second phase of development and would be directed towardsincreasing the port's capacity to handle larger ships, resulting in anincreased volume of trade.

Pipavav, which serves the thriving industrial and agricultural hinterland ofthe north-west, is the first port to be privatised in India, whereunder-developed infrastructure has impeded the growth of internationaltrade.

CDC is the second major foreign equity holder in the port, which will beoperated by the Port Authority of Singapore, which is making a substantialequity investment.

Pipavav, nearing the first phase of construction, would be equipped tohandle 12 million tonne of cargo annually.

The first phase includes a 725 quay with three berths for bulk, general andcontainer cargo, liquefied petroleum gas terminals and a liquid cargoberth.

CDC is the second major British company to invest in India's first privateport, after the multinational British Gas which is leasing land to develop a$450-million liquefied natural gas receiving terminal and re-gasificationplant with an initial handling capacity of 2.65 million tonne a year.

British Gas is leasing 200 acres of land to develop tank farms for thestorage of liquefied imports and has signed an agreement for other siteswith Indian Oil, Bharat Shell, Stolt Nielsen and Mitsubishi.

The Scandinavian company, Mersek, is the largest container shipper in Indiaand plans to use Pipavav for container shipments starting next month andthen expand to import refrigerated containers.

So far Pipavav has handled ships in the region of 35,000 dwt, but aftercurrently ongoing dredging, it will have a 13.5m draft and would be able tohandle giant ships of 50,000 dwt.