The estimated Rs 800-crore project for dredging and widening of the main harbour channel at Jawaharlal Nehru port to accommodate new generation and bigger ships is once again proving to be a non-starter for India's premier container port.
Although having finalised the successful bidder, JNPT, which has been trying to implement the project for the more than five years now, may be forced to come back to the starting line and begin the tendering process all over again.
This comes in the wake of the foreign dredging company, which was declared the lowest bidder in July last year, serving an ultimatum to the port, threatening to pull out of the project if the port failed to get the required clearance from the Minister of Shipping before April 18, sources said.
The sources say that it is unlikely for the port to get the Ministry's nod with just about 10 days in hand. And this means, the port will have to start the tedious tendering process afresh after the April 18 deadline expires.
Vital project
For JNPT, this project is vital, as shipping lines are increasingly deploying bigger container vessels for gaining economies of scale. Thus, with increasing trend towards larger sized container ships, draught has become an important factor in the choice of port by shipping lines.
JNPT may lose out in the race, as at present vessels having a draught of 12.5 mts have to navigate through Mumbai harbour channel and JNPT channel, making use of the tidal window. In order to accommodate larger vessels, the port, years ago, had proposed to deepen the draught of the 35-km long channel to 14 mts to accommodate ships of 6,000 TEUs and later to 15 mts.
After much delay, the port was finally able to shortlist four companies for the project in 2006-Van Oord BV and Boscalis of the Netherlands, Jan de nul of Belgium and Dredging International.
Interestingly, India's own dredging house, the state-owned Dredging Corporation of India, was not among the short-listed bidders.
After opening the price bids on April 10, 2007, the port took up evaluation of the bids. The port's board, in its meeting on July 19, 2007, approved to award the work to the lowest bidder, Van Oord BV and submitted the proposal to the Ministry for approval.
Sources said Van Oord's bid was for about Rs 1,000 crore, which overshot the port's own estimate of Rs 800 crore for the project. In fact, the highest bid went up to Rs 1,200 crore, according to the sources.
It is not known why the Ministry has been sitting on the proposal all these months. While some believe that the Ministry was not happy that the lowest bid overshot the port's estimate, others feel that it is not too warm with the idea of a foreign dredging house handling such a crucial project.
With capital dredging requirement in India surging, there are not too many dredging companies, both Indian and foreign, to handle the scale of work. Dredging houses are thus in no mood to wait for too long for dredging project approvals, as there is ample scope elsewhere in the domestic market.
DCI and, on a much smaller scale, Jaisu Shipping, are the only two Indian dredging companies. However, names of prospective new entrants like Reliance, Shipping Corporation of India, Essar and Sican are doing the rounds.
Against this background, it seems that JNPT will have to brook further delay in the dredging project, which takes at least two and half years for execution.
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