The Hindu Business Line : Maersk-Concor set to bag JNPT deal — Quotes highest revenue share for new box terminal

THE Maersk-Concor team is set to win the deal for developing and operating a new container terminal at Jawaharlal Nehru Port (JN Port) by quoting the highest revenue share of 35.503 per cent when the price bids were opened on Thursday.

In the process, the Maersk-Concor consortium pipped other contenders for the Rs 1,000-crore project including United Liner Agencies India Pvt Ltd-Hamburg Port Authority, PSA Corporation Ltd-Bombay Dyeing Group and Marubeni Corporation-Evergreen Marine Corp.

The United Liner Agencies India Pvt Ltd-Hamburg Port Authority quoted the second highest revenue share of 31.888 per cent, while PSA Corp Ltd-Bombay Dyeing Group came third with a quote of 26.892 per cent. The revenue share quoted by Marubeni Corp-Evergreen Marine Corp, the fourth bidder, was 18.25 per cent, Shipping Ministry officials said.

Since all the four bidders had passed the technical scrutiny and with the JN Port Trust prescribing a Minimum Guaranteed Throughput (MGT) for the private operator, the bid is decided on the basis of the highest revenue share quoted by the bidders. Revenue share implies that percentage of the annual operating gross revenues that the private operator is willing to share with the port trust (licensor).

As per the MGT clause, Maersk-Concor will have to handle 1.4 lakh twenty-foot equivalent units (TEUs) in the first year of operations and touch 1.3 million TEUs in the seventh year.

The winning bid of Maersk-Concor team will now be put up to the Board of Trustees of the Port Trust for approval and then submitted to the Shipping Ministry for a final clearance.

The Maersk-Concor team will float a special purpose vehicle (SPV) incorporated in India to develop and run the project on a build, operate and transfer (BOT) basis for a concession period spanning 30 years. Maersk A/S, a group company of the Denmark-listed world's largest container shipping line A P Moller-Maersk A/S, will hold 74 per cent equity in the project SPV while the balance will be held by Concor, a railway PSU.

Talking to Business Line, the Shipping Secretary, Mr D.T. Joseph, said that the price bid submitted by Maersk-Concor was "definitely good." "We also see it as an indicator that there is lot of profit in the business. The healthy manner in which the bidders have competed for the project gives us lot of confidence to further improve our capabilities with private investments," he remarked.

Mr Joseph disclosed that JNPT would take the winning bid to the Board of Trustees around March 15 and then submit it to the Centre. "We will clear it as soon as possible and hope that the work on the new container terminal will begin quickly," he stated.

The JNPT deal will be the second major presence by Maersk A/S on the Western coast while this will be the maiden foray by Concor, the monopoly rail hauler of boxes, into the business of handling containers at ports.