The Hindu Business Line : No takers for Mumbai box terminal project

Even though P&O Ports and Marubeni-Evergreen had submitted technical bids for the Mumbai port terminal, they chose not to submit financial bids last week, as per the schedule. Instead, the two have sought time for submission of financial bids.

Informed sources say the two operators were awaiting the completion of the bidding process for the JNPT terminal, after which they wanted to decide on whether to submit the financial bids at all. Now that JNPT has wrapped up the bidding process for its box terminal project, with the Maersk-Concor combine breasting the tape after it quoted the highest revenue share offer of 35.50 per cent, it is expected that P&O Ports and Marubeni-Evergreen may show revived interest in the Mumbai port project.

Market analysts say in terms of marketability, the JNPT terminal holds out better prospects, as was evident by the response that it attracted. In fact, the terminal already has a ready market of at least five lakh TEUs; this is essentially the incremental cargo that could have been available for JNPT and NSICT terminals this fiscal but which had to find alternative gateways as the two terminals were not being able to take in any additional cargo due to space constraints.

However, according to the analysts, the Mumbai port terminal can expect getting some additional spillover cargo from the JNPT terminals. "The response to the Mumbai port invitation could have been better. Perhaps, the timing is not right. The port should have either completed the bidding process by now or waited till the JNPT bidding process is completed," an analyst said.

Meanwhile, the port is going ahead with another privatisation exercise; it plans to handover its ship-breaking facility to a private operator on a revenue sharing arrangement.

Mumbai port has two ship-breaking facilities: one at Lakdi Bunder and the other at Powder Works Bunder, both in proximity to each other. The port has proposed to charge an upfront fee of Rs 50 lakh from interested parties. The rental that the port may fix for the deal is Rs 20 per sq. mt. per month for a 10-year concession agreement.

Further, the successful bidder will have to pay a royalty of Rs 325 for every LDT (Light Displaced Tonne), while offering a discount of 20 per cent for handling more than 10,000 LDT.