In the single largest project awarded in the port sector, PSA Singapore has signed an agreement with Jawaharlal Nehru Port in Navi Mumbai to develop its fourth container terminal, entailing an investment of US$1.3 billion.
The project involves developing a capacity to handle 4.8 million TEUs a year in two phases, reported the Hindu.
PSA has to submit a bank guarantee of $62.5 million for the project. “It has already submitted $12.5 million and the remaining $50 million will have to be submitted in 80 days,” said a Shipping Ministry source.
Earlier this year, PSA bagged the project by offering to share 35.9 percent of revenue. The contract allows PSA to design, finance, build, operate the terminal and collect revenues from port users for 30 years.
At the end of 30 years, PSA has to transfer the project back to the Government.
This is the second time PSA bid for the project. A few years ago, when container traffic in the country was seeing sharper growth, PSA had offered a much higher level of revenue share – 50.08 per cent – to develop and operate the terminal. It had subsequently backed out from signing the concession agreement.
Now, after signing the agreement, the project has to be developed in two phases. In the first phase, 1,000m of quay length had to be developed to handle a capacity of 2.8 million TEUs a year in three years.
“In the best case scenario, PSA has to start developing the additional two-million-tonne a year capacity in three-and-a-half years. In the worst case scenario, it has to develop the capacity in five-and-a-half years,” the official said.
The trigger to start the second phase of capacity expansion will kick off either after two years or within six months of the developer handling one million tonnes of throughput, whichever is earlier.
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