20 Sep 2012 4:19 PM from CapEx
Suparna Chattopadhyay

JNPT cancels contract awarded to consortium of PSA & ABG Ports

Consortium had failed to sign the concession agreement within stipulated time

Jawaharlal Nehru Port Trust (JNPT) has decided to terminate the contract it had awarded to a consortium of PSA Mumbai Investments pte Ltd and ABG Port Ltd for its fourth container terminal, due to delay in signing the concession agreement. The port trust will evoke the bank guarantee of Rs.670 million that PSA Mumbai Investments pte had submitted as security bid. The consortium had failed to sign the concession agreement for the project even after the deadline for signing the agreement was extended.

This was the second time that PSA Mumbai Investments pte. had failed to sign the agreement. In January 2012, the company had backed out from signing the concession agreement, saying that they were unaware, that stamp duty needs to be paid for registering the signed document. The date for signing the agreement was then extended to August 2012, which was missed again by PSA Mumbai Investments pte.

The construction contract for the Rs.85 billion container terminal project was awarded to a consortium led by Government of Singapore owned PSA Mumbai Investments pte Ltd and Mumbai-based ABG Ports in September 2011. The consortium won the bid after it had offered to share around 51% of the annual revenue with JNPT. However, there were media reports around April 2012, that ABG Port wanted to pull out of the consortium, and PSA Mumbai Investments pte was okay with the decision. PSA had informed JNPT, that it was ready to do the project alone. But JNPT refused stating that it was against the bidding norms.

The fourth container terminal at the JNPT was proposed in August 2003 with an investment of Rs.35 billion. But approval from the Central government and the Board of Directors on the project was received much later in March 2008. Due to some legal issues the project was stalled for few months in 2009 but was revived again in December 2009. Delay in implementation has escalated the cost of the project to Rs.85 billion.

The proposed terminal was to be implemented in two stages with a quay length of 1000 m. It would come up at the location of the BPCL jetty. The scope of the work includes extending the current length of the BPCL jetty which is 300 m by 700 m. And then relocate BPCL jetty to a new marine terminal. Along with the fourth terminal the contractor is also suppose to develop the rail ICD for the terminal as well as the road leading from the port approach road to the terminal.

The investment in the 1st phase is estimated to be around Rs.52 billion and commissioning should be within 36 months from signing of the concession agreement. Investment in the second phase will be around Rs.33 billion. Completion of phase II should be within 24 months of commencement of work. The capacity of the terminal once both the phases are commissioned will be 4.8 million TEUs (Twenty-foot Equivalent Unit).