Financial Daily from THE HINDU group of publications
Wednesday, Feb 25, 2004
Government - Policy
Ministry announces minor changes in dredging policy
New Delhi , Feb. 24
THE Shipping Ministry has finally circulated the new dredging policy to all the major port trusts, incorporating minor changes to remove the ambiguities that had crept in when the policy was first announced on January 19.
According to the new policy, all the 12 major port trusts (other than Kolkata Port Trust) shall invite bids for dredging wherein state-run Dredging Corporation of India (DCI) will have the right of first refusal under Sections 406 and 407 of the Merchant Shipping Act only if its rate is within 10 per cent of the lowest technically qualified offer.
If more than one Indian company including DCI participates in the tender, the right of first refusal will be granted to the Indian company which had quoted the lowest and is within 10 per cent of the lowest technically qualified offer. This clarification was included by the Shipping Ministry while circulating the new policy to all the major port trusts on February 17.
"This will provide a level-playing field between DCI and other domestic private dredging companies", says the policy, which will come into force from April 1 for a three-year period.
In this regard, the Director-General of Shipping had recently modified its guidelines of November 2002 to allow the right of first refusal to Indian shipping companies under Sections 406 and 407 of the Merchant Shipping Act only if the bid of Indian companies is within 10 per cent of the lowest offer, says the Ministry.
According to the Ministry, the new policy would be applicable to both maintenance and capital dredging works at major ports including the capital dredging requirement of Kolkata Port.
However, the maintenance dredging requirement of Kolkata Port Trust (KoPT) shall continue to be met by DCI, which accounted for 57 per cent of the operational income of the state-owned dredger during fiscal 2003.
In respect of dredging contracts already entered into by major port trusts with DCI, the same shall continue till the validity of the contract, where after the above guidelines shall be applicable.
The Ministry has also decided to bring minor ports owned by the State Governments and private ports under the ambit of the new dredging policy.
"The DG (Shipping) would be requested to frame suitable guidelines to ensure that permission to charter foreign dredging vessels to minor ports/private ports is given only if they followed a competitive bidding process for awarding the contract wherein Indian dredging companies have been given full opportunity to participate," the policy stated.
Minor ports/private ports were so far awarding their dredging works either by floating limited tenders or through negotiations with foreign dredging companies, a practice which is sought to be dispensed with to encourage competition among dredging companies both domestic and foreign.
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