JNPT terminates contract of Singapore's PSA-led consortium
The Jawaharlal Nehru Port has decided to terminate the contract awarded to a consortium of Singapore port operator PSA International to build a container terminal. This is because the consortium failed to sign the concession agreement within the extended deadline that ended last month, Daily Shipping Times reported.
The Board of Trustees of the port, also decided to encash the security bid of Rs 67 crore. ABG Ports, a Mumbai-based company is the local partner in the consortium that won the project in a global tender last year. This could be the first time that such a stringent action has been taken against a bidder in a PPP port project in the country.
PSA International, one of the largest port operators in the world, is owned by the Government of Singapore. The company already operates port terminals in Chennai and Tuticorin and holds stakes in two other terminals in India.
“We have decided to terminate the ‘letter of award’ and appropriate the bank guarantee as the Singapore party failed to sign the contract,” said a JNPT trustee after the board meeting.
The Rs 6,700-crore project , the fourth container terminal at JN Port was awarded to the consortium on September 26, 2011, after it emerged as the highest bidder offering to share 50.82 per cent of the annual revenue with the landlord port, making it the highest revenue share in a PPP port project.
In January this year, PSA backed out at the last moment from a ceremony scheduled in Delhi to sign the project’s concession agreement. The excuse was that PSA was not aware that it will have to pay stamp duty for registering the signed document. Partners in the consortium, ABG Ports in Mumbai and PSA decided to part ways. PSA agreed to take up the project on its own. But this was not allowed as it was against the bidding norms.
JNPT will now have to seek re-tendering of the project. The JN Port, the largest container port in the country, has three terminals , two run by private parties and one by the port trust.