Singapore's PSA International trumped Adani Ports & SEZ to win a bid to construct and manage the much-delayed fourth container terminal at Jawaharlal Nehru Port Trust (JNPT) by offering more than 35 percent revenue share to the port, even as five other qualified bidders decided to abstain from participating.
The only other bidder for the US$1.28 billion terminal was Adani Ports & SEZ, which offered a 29 percent revenue share, compared to PSA International's 35.9 percent, N N Kumar, chairman-in-charge at JNPT told The Economic Times.
The project, which is going to be awarded on a design, build, finance, operate, transfer (DBFOT) basis, was first awarded to PSA in 2012. But the company exited the project citing troubles with partner ABG Ports.
"35.9 percent is a very good bid considering the size and complexity of the project," Kumar said. The JNPT's board will give its final nod on February 26. Adani Ports declined comment.
The project was first awarded to PSA with ABG Ports, but the winning consortium split after offering a revenue share of more than 50 percent, leaving the project hanging. The industry as well as other bidders had expressed reservations that JNPT allowed PSA to bid for the project again.
"This is disappointing. There should have been at least two more bidders," said Ramesh Singhal, chief executive of imaritime Consultancy. "The overall market scenario has dramatically changed, growth is not taking place and huge capacity has already come up."
Explaining why there were only two bidders, Anand Sharma, a director at Mantrana Maritime Advisory, said some bidders were concerned about being able to raise such a huge sum for the project.
Apart from PSA and Adani Ports, Dubai Port World, APM Terminals, Sterlite Ports, United Liner Agencies (ULA) and International Container Terminal Services Inc (ICTSI) had qualified.
Sources close to the matter said that ULA and ICTSI were having issues with security clearances while APM Terminals and DP World were seeking more time. There were also concerns regarding last-minute changes to the project design and renewal of environment clearance from the government.
JNPT is India's largest container port, handling about half of total container traffic. The fourth container terminal, when it comes up, is going to be 2,000m in length adding 4.8 million TEUs of capacity per annum for JNPT.
JNPT currently has a capacity of over four million TEUs. JNPT currently has three container terminals, out of which only one is operated by the port while the other two are operated on a public-private partnership (PPP) basis by DP World and APM Terminals.
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