The WIT Port, which provides container handling, general and bulk cargo handling, agency and logistics and related services, is developed in 2 phases (Phases I & II). Phase I has been operational since 2004 and Phase II is going through the project approval process. The Group's interest in the WIT Port is 85% (Phase I) and 44% (Phase II). The WIT Port when fully developed by 2013 will provide an annual handling capacity of 1,300,000 TEUs.

Shareholding in WIT Port Phase I

Phase II of WIT Port

The Group has, since the beginning of the WIT project, been granted the right of first refusal for the development of Phase II of the WIT Port by the PRC joint venture partners who are Wuhan government agencies. Pursuant to this and the importance given to the development of Wuhan into a major hub port and logistics base for the Central China region under the 11th 5-year Plan, the Group and its joint venture partners have been planning for the development of Phase II of WIT Port. Since the signing of a Heads of
Agreement in 2005 and a supplemental agreement in April 2007 to commission a development plan which has been approved by the Central Government.

Under the Heads of Agreement, the Group will take a 44% equity interest in the Phase II development with the rest of the interest to be taken up by the two PRC Joint Venture partners of WIT. The Phase II development will increase designed handling capacity by 800,000 TEUs, taking the overall annual designed handling capacity of the WIT Port to 1,200,000 TEUs. Negotiations of the terms of the joint venture agreement are progressing slowly. The Group will keep shareholders informed of the development and if the Board approves for the negotiated project to go ahead, the project will be tabled for shareholders’ approval.

Heavy Item Port

On 1 August 2007, the Group entered into a heads of agreement with the Wuhan Xinzhou District Government to construct and operate a heavy item port (重特大件碼頭) (the “Heavy Item Port” or the “Project”) to handle large and heavy cargo (up to 600 tonnes in weight) shipments to cater for the transportation needs of some major international power generation, transmission and distribution equipment manufacturers which have chosen to establish manufacturing plants in the Yanglou District of Wuhan, where the WIT Port is situated.

The provision of a heavy item port facility is part of the Wuhan Government’s commitment to these world class manufacturers to attract them to establish
manufacturing facilities in Wuhan. The Heavy Item Port will be located adjacent to the WIT Port and will be managed by the same management team to achieve economies of scale. Total estimated capital expenditure is estimated to be around RMB150 million.

The Group has commissioned for the feasibility studies and preliminary designs to be included in the submission of the application for Wuhan Government approval (立項).

On 30 September 2009, the Group entered into a land acquisition agreement with the Wuhan Xinzhou District Bureau of Land and Resources (武漢新洲區 國土資源管理局) to procure 124 mou of land for the development of the Heavy Item Port. The land procurement procedures are in progress.