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Amit Mitra

Mumbai , Nov. 21

THE race for the Rs 900-crore third container terminal project at Jawaharlal Nehru Port (JNPT) is hotting up, with the three new joint ventures that entered the fray following a realignment of the existing bidders having begun campaigning against consortiums being led by shipping lines.

At the centre of the campaign is the view that if shipping lines are allowed to operate a box terminal, it would lead to a "monopoly environment" since they would accord priority to their ships calling at the port.

Apparently, this campaign is being targeted against the Maersk-Concor consortium, which appears to be a strong contender since Maersk operates the world largest container lines and Concor, a subsidiary of the Railways, holds monopoly over the movement of container trains from and to the ports.

The other strong bidders are PSA Corp-Nowroji Wadia and Sons of the Bombay Dyeing group, Seaking Infrastructure and the French companies, CMA and CGM, Terminal Link and Bouygues, United Liner Agency (ULA) of JM Baxi group-CDC Corp Plc of the UK, CSX, SSA and Marubeni.

The bidders who are trying to launch the campaign against the shipping lines are doing so through the Western India Shippers' Association (WISA), a Mumbai-based shippers' body.

According to WISA, the bidding process permits shipping lines to bid for the project, without an appropriate clause to prevent monopoly.

Mr Srinivasan, WISA President, said: "The Civil Aviation Ministry has announced that no airline would be permitted to participate in the bid to prevent monopoly by airports. It appears that what is good the Civil Aviation Ministry is not good for the Shipping Ministry."

The campaigners also argue that shipping liners like Maersk, which has a major share of Indian cargo, would give preference to its own cargo and thereby create a monopoly.

Further, they said, the shipping liners could resort to transfer pricing by reducing the port tariff and offset it by increasing the freight rate. "A one per cent increase in freight rate is equivalent to 18 per cent increase in port tariff."

According to WISA, other main lines would be hesitant to come to a port run by a particular shipping line for fear that their client information would be known to the line port- operator.

It has also said that since Maersk is the largest container line and Concor has a monopoly in rail connectivity, "the consortium will give preference to the Maersk line, if it is successful (in bagging the project), which does not provide a level playing field."

Sources, however, told Business Line that the JNPT authorities are not buying the argument that if a shipping line were to operate the terminal it would lead to a monopoly environment.

In any case, if the shipping line or any of the bidders who is successful can bring the port more traffic one way or the other, the port has "nothing to lose".

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