JNPT may split terminal four project into two
State-owned Jawaharlal Nehru (JN) port may slice a mega terminal project into two when it seeks fresh bids in a couple of months after an earlier award sputtered and died, reported The Mint.
The new goods terminal, India's largest by far, is proposed to handle 4.8 million containers a year and cost US$1.5 billion to build.
The port on October 16 withdrew the letter of award issued to PSA International when the Singapore-based port operator failed to sign an agreement a year after it was awarded the project on September 26 last year in a public auction.
The port also encashed the firm's bid security of $12.3 million.
"We want to make the projects simpler for firms to bid and also cheaper," said a spokesperson of India's largest container gateway.
"There is scope for at least five-six major changes in the scope of the project," port chairman L. Radhakrishnan said earlier.
The port now proposes to break the project into two separate terminals with a berth length of 1km each, capable of handling 2.4 million containers per terminal, the spokesperson said.
The port also plans to drop a key and expensive tender condition that requires the private developer to relocate a liquid cargo jetty run by state-run Bharat Petroleum Corp situated in the vicinity of the new terminals. This relocation, considered a complex exercise, would itself have cost about $183 million.
"The failure of the earlier tender is a blessing in disguise," said Devdatta Bose, deputy general manager (ports) at Tata Consulting Engineers. The port can expand without the relocation and that will save huge costs, he said, and added, "It's technically possible".
The extent of reclaiming huge tracts of land from the sea would also be scaled down substantially, the port spokesperson said. The port may also take over the task of building a new approach road or a flyover to the terminals by funding it through sale of tax-free bonds. In the previous tender, this was the responsibility of the private developer.
The port plans to bid out both the projects simultaneously. A firm would have the option of either bidding for one project or for both, without any restrictions on operating both the terminals.
The changes in the scope of the projects need to be approved by the shipping ministry ahead of the auction, he said.
"With the changes in the scope of the projects, the port will be able to attract smaller operators also. As a result, it will lead to wider participation of a large number of firms.
Otherwise, only the big port operators would have been qualified to bid," said the managing director of a Mumbai-based port logistics firm that runs cargo-handling facilities at Vizag and Tuticorin ports. He spoke on condition that neither he nor his firm be named.
The gateway near Mumbai, which loads around 55.63 percent of India's container cargo passing through its ports, is looking to expand capacity to cater to the growth in volume. In the year ended March 31, it loaded 4.32 million TEUs, operating at more than its designed capacity of 3.6 million TEUs a year.