Jawaharlal Nehru port's Rs 800-crore project for dredging and widening of the main harbour channel, which has been a non-starter for over five years, appears set to face fresh delays.
This comes in the wake of the port deciding to scrap the on-going tendering process and to go in for fresh tenders, as the latest bid by a foreign dredging house exceeded the port's estimated outlay for the project.
Though it had finalised the successful bidder earlier this year, JNPT could not award the work as it was unable to get the required clearance from the Ministry of Shipping for the latest bid.
The bidder had also threatened to take back its bid, claiming that the delay in finalisation of the project had led to an increase in the project cost, sources said. This has now forced the port to flag off a fresh tendering process.
For JNPT, this project, which is aimed at accommodating bigger vessels in the port, is vital as shipping lines are increasingly deploying bigger container vessels to gain economies of scale.
Thus, with increasing trend towards larger container ships, draught has become an important factor in the choice of port by shipping lines. JNPT may lose out in the race for getting a bigger slice of India's increasing container traffic, 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.
The contenders
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 their evaluation. The port's board, in its meeting on July 19, 2007, decided 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 happy 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, the names of prospective entrants, including Reliance, Shipping Corporation of India and Essar, are doing the rounds.
Shipping companies are also looking at foraying into dredging. While Mercator Lines has purchased a few dredgers and leased them to DCI on charter basis, SCI is also planning to enter this space.
Dredging costs have increased sharply in recent times, with industry experts saying the cost has increased by about 75 per cent in the last two years. Capital dredging costs now range between $5 and $ 6 per cubic metre.
Gearing up to handle more
Despite its draught constraints, JNPT handled a throughput of 55 million tonnes, including non-container cargoes, last fiscal, registering a 24 per cent growth, thanks to the boom in containerised cargoes. In terms of TEU units, JNPT handled 4.06 million TEUs, reflecting a 23 per cent growth.
Of this, JNPT's own terminal handled 1.26 million TEUs, while the other two privately run terminals, NSICT and GTICT, handled 1.51 million tonnes and 1.29 million tonnes respectively.
Studies indicate that the port may be required to handle container traffic of 8 million TEUs by 2015-16.
In view of expected growth in container traffic and the need for faster turnaround time, the port is planning to extend container berth by 330 mts, along with the construction of a 50-metre-long finger jetty at the cost of about Rs 600 crore.
It expects the project will be operational by 2010. This will add a fresh capacity of about 7.2 million tonnes (ore 0.6 million TEUs) per annum. The last date for the Request-For-Proposal document has been fixed as August 25, 2008.
In addition to this, the port has drawn up plans to develop a fourth container and marine chemical terminal at a cost of about Rs 4,000 crore.
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