Bangalore: The Union government-controlled Jawaharlal Nehru port on Wednesday scrapped a decision by its board late last year to split a planned Rs. 8,200-crore container terminal into two.
Critics said the latest decision was pushed through hurriedly by a board of trustees that had fewer members than usual and would lead to the badly needed expansion suffering further delays. Bids will now be sought for the much-delayed capacity expansion as a single project, a tender for which will be issued in the next few days, two people briefed on the matter said on condition of anonymity.
The decision to revert to the single-project format came after L. Radhakrishnan, former port chairman and the driving force behind the plan to split the project, left on 13 May to become the principal home secretary of Kerala.
A reduced-strength board of trustees cleared the latest single-format proposal on Wednesday, reversing the 22 November decision to split the project into two, a port official having direct knowledge of the board decision said. He spoke on condition of anonymity because he is not authorized to speak to the media.
A spokesman for the port confirmed the board decision but declined to elaborate.
The decision could potentially turn controversial as it was cleared by only seven members—all of them government nominees—out of a 16-member board.
The numbers are fewer because the government is yet to reconstitute the board of JN port after the term of the earlier board ended on 31 March. Seven trustees representing the trade and two representing labour interests are yet to be nominated on the board by the shipping ministry.
The Wednesday meeting was chaired by N.N. Kumar, the port’s deputy chairman and chairman in charge, and attended by a representative each of the shipping ministry, the Directorate General of Shipping, the customs department, the Indian Railways, the Coast Guard and the government of Maharashtra where the port is located.
“According to procedure, the board of trustees can take decisions with the participation of at least six members who will make up the quorum,” a second port official said, justifying the decision approved by the seven trustees. He too spoke on condition of anonymity.
The move to break up the mega terminal into two was an effort to revive the capacity expansion project that collapsed after the auction winner refused to sign an agreement to construct the facility.
Each terminal was to have a berth length of 1km with a capacity to load 2.4 million standard containers a year, according to the restructuring plan approved in November.
JN port had earlier tried to auction the terminal that was planned to load 4.8 million standard containers a year as a single project. That would have made it India’s biggest single container terminal by capacity and size.
On 16 October, the port withdrew the letter of award given to a consortium led by Singapore-based PSA International Pte Ltd, the world’s top container terminal operator, after it failed to sign an agreement a year after it was awarded the project on 26 September 2011 in a public auction. Former port chairman Radhakrishnan had said in January that developing the terminal through two competing partners by re-designing the project would reduce costs and halve the time for implementing it to four years from eight.
A shipping ministry official said splitting the project would pose implementation risks.
“For instance, who among the two terminal operators will build the common approach road to the terminal for bringing and evacuating containers and how will the cost be apportioned to the second partner?” he said, requesting anonymity.
A Mumbai-based port consultant backed Radhakrishnan’s plan, saying there was no market appetite for big port projects.
“Splitting the project into two would allow smaller firms to bid, help get funding comparatively easily, create competition and enable the port to build the entire capacity much faster,” he said, declining to be identified.
A single, large project will “reduce competition because the pre-qualification criteria will be too stiff, allowing only a few big firms to bid, potentially lowering the revenue share accruing to the government-owned port,” he said.
“India’s exporters and importers will suffer if the project is delayed when implemented as a single project,” a Mumbai-based shipping company official said. “Why should a board which barely meets the quorum devoid of any trade or labour representation be in a tearing hurry to reverse a much-deliberated and widely participated decision of the earlier board?” he said, asking not to be named.
JN port, which loads more than half of India’s container cargo passing through its ports, is looking to expand capacity to cater to a growth in volumes. In the year to March, the port loaded 4.26 million standard containers, operating at more than its designed capacity of 3.6 million standard containers a year.
Source:-http://www.livemint.com
No comments:
Post a Comment