The trust that runs the Union government-owned Jawaharlal Nehru port near Mumbai on Wednesday approved the highest price bid placed by Singapore’s PSA International Pte Ltd for building a Rs.8,000 crore container loading facility at the port that handles more than half of India’s container volumes.
The price bid by PSA Bharat Investments Pte. Ltd, a wholly- owned company formed by PSA International, was approved by the board of trustees of JN port on Wednesday, at least two trustees who attended the meeting said on condition of anonymity.
A spokesman for Jawaharlal Nehru port confirmed the decision taken by the board of trustees.
Last week, PSA emerged as the highest bidder for the project by quoting the highest revenue share price bid of 35.79%.
Ports 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 privatization policy of the government.
“JN port will now issue a letter of award to PSA for the project,” one of the two trustees cited above said on condition of anonymity because he is not authorized to speak to the media.
The bidding schedule for public-private partnership projects framed by the Union government mandates that the successful bidder has to sign the concession agreement within 30 days of getting the letter of award from the port authority.
PSA International, the world’s biggest container port operator by volumes, is fully-owned by Temasek Holdings Pte Ltd, the Singapore government’s investment company. PSA handled 61.81 million standard containers in calendar year 2013, according to its website.
PSA International could not be reached immediately for comment.The new project, the fifth at India’s busiest container port, is key to its capacity expansion plans.The new terminal, which will be designed to load 4.8 million standard containers a year, involves the biggest single foreign direct investment yet in an Indian port project, estimated about Rs.2,670 crore.
In the year to March 2013,Jawaharlal Nehru port loaded 4.26 million standard containers, operating at more than its designed capacity of 3.6 million standard containers a year.
Jawaharlal Nehru port currently has three container loading terminals while a fourth one is under construction by Dubai’s DP World Ltd.The port, one of the 13 owned by the union government, is expected to handle 11 million standard containers by 2016 and 23 million standard containers by 2020, according to a 10-year plan for ports unveiled by the shipping ministry in 2011.
The project will be the first to utilize the new guideline for tariff setting at ports owned by the union government that was announced in July 2013.
The new rules grant flexibility to cargo handlers to raise their rates every year based on market conditions subject to a cap of 15% if they comply with certain performance standards.
In the earlier rule, cargo handlers had to seek approval for rate increases from the regulator once in three years, which was either granted or rejected.
Source:- livemint.com
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