DP World has won the auction to set up a new container loading facility at Jawaharlal Nehru port near Mumbai after the Dubai-based port operator agreed to increase its revenue share offer by a percentage point, reported The Mint.
The lone price bid submitted by DP World for the US$139.21 million, 800,000 standard container capacity a year terminal was approved by the board of trustees of JN port, a port spokesman said.
This will be the second terminal to be run by DP World at JN port.
The board gave its approval after DP World agreed to share 28.09 percent of its annual revenue from the terminal with the Union government-controlled port, after negotiations.
DP World had originally placed a revenue share price bid of 27.09 percent when the bid was opened on October 4.
DP World declined to comment saying it was yet to receive a formal communication from the port on its offer.
Port contracts at Union government-controlled ports are decided on the basis of revenue share.
The bidder willing to share the most from its annual revenue with the government-owned port gets the contract, according to the port privatisation policy of the Union government.
The new terminal will be adjacent to Nhava Sheva International Container Terminal or NSICT, run by DP World at the port. It will have a contract period of 15 years, ending in 2027. DP World's 30-year contract for the existing container terminal also ends in 2027.
NSICT is the first privately-run container loading facility to start operations at a Union government-controlled port after it opened the ports sector to private funds in the late 1990s.
The new facility will help JN port, India's busiest container port, add much-needed capacity. In the year to March, JN port loaded 4.32 million standard containers, operating at more than its designed capacity of 3.6 million standard containers a year.
The port has three container terminals – one run by the government-owned port itself while the other two are run separately by DP World and a joint venture between APM Terminals Management and Container Corp of India.
The port can't handle more containers unless it expands capacity.
JN port is expected to handle 11 million standard containers by 2016 and 23 million standard containers by 2020, according to a 10-year plan unveiled by the shipping ministry in 2011.
2012 November 1 16:56