The government is confident that Dubai World?s financial crisis will not affect operations of its subsidiary DP World in India. The government was earlier apprehensive of the impact of the Dubai crisis in some major ports in India, where DP World operates container terminals. Last week, rating agencies had put DP World?s Indian port projects on a negative watch.
After the news of Dubai World demanding a six-month standstill on $59-billion debt broke last month, the ministry of shipping asked the ports associated with DP World to give data to ascertain whether or not the crisis will have any repercussion in the country. Dubai World holds 80% stake in DP World, which accounts for 40-45% of container traffic in India.
?The Indian port sector is immune from the Dubai crisis, as DP World is out of the purview of the restructuring of Dubai World and its real estate arm. DP World is going about the present projects and is also bidding for new projects in the country,? a senior official in the shipping ministry, involved in analysing the data provided by the ports, told FE.
The domestic port sector is also positive on the DP World?s operations. On the condition of anonymity, a top official of Mundra Port and special economic zone said, ?The company has a positive cash flow position and can continue its operations comfortably.? DP World operates Mundra International Container Terminal at Mundra Port and SEZ.
However, the official pointed out a possibility of the company?s operations being affected. ?In case, Dubai World absorbs some of the liquidity available with DP World, it may cause harm to the latter. Otherwise, there will be no impact,? he said.
DP World is the fifth largest port operator of the world and is either operating or developing terminals at Mundra, Navi Mumbai, Kochi, Chennai, Visakhapatnam and Kulpi. It has present investments of $2 billion in India and has planned $12 billion outlay in the next five years.
