The Hindu Business Line : Maersk move to ease JNPT congestion

DANISH shipping and ports conglomerate Maersk A/S, which together with the state-owned railway PSU Concor won the bid to develop a new container terminal at Jawaharlal Nehru Port, has said that it would look at starting part operations at the facility as soon as possible to ease the congestion facing the premier container port in the country, a top Maersk official disclosed.

"The terminal operated by JN Port and the one run by P&O Ports at Nhava Sheva are very congested. Thus, we will in conjunction with JNPT evaluate possibilities of alleviating the congestion through a phased start-up of the new terminal," Mr Hans Ole Madsen, Managing Director, Maersk India Pvt Ltd told Business Line.

A Shipping Ministry official said that there is a provision in the Concession Agreement that allows Maersk-Concor to operate the terminal during the construction stage as well. "The only condition is that they will have to share 35.503 per cent of whatever they earn during this stage also with the port trust," the official revealed.

The Maersk-Concor consortium had won the bid to build and operate a 1.3 million twenty-foot equivalent units (TEU) capacity terminal (the third over-all in the port and the second with private investments) for a 30-year concession period after quoting the highest revenue share of 35.503 per cent.

Jawaharlal Nehru Port Trust (JNPT) has signed the Licence Agreement on August 10 with Gateway Terminals India Private Ltd, the joint venture terminal operating company floated by Maersk (holding 74 per cent stake) and Concor (holding the balance 26 per cent equity).

Gateway Terminals paid Rs 78 crore to JNPT while signing the Licence Agreement comprising Rs 15 crore as upfront fees, Rs 23 crore towards advance rentals for the first year and Rs 40 crore as performance guarantee.

The Maersk-Concor combine will have to build the new box terminal by re-developing an unutilised bulk terminal and start operations as a common user facility within two years (by August 10, 2006) of signing the Licence Agreement.

Maersk which runs the world's largest container shipping line Maersk-Sealand will shift its operations from the Nhava Sheva International Container Terminal (NSICT) run by P&O Ports to the new terminal when it starts functioning. Maersk accounts for about 20 per cent of the box traffic handled at the Nhava Sheva terminal.

According to Mr Madsen, the next step is to attain financial closure of the project, which is estimated to cost around Rs 1,073 crore. According to the tender conditions, financial closure must be achieved within 180 days of signing the Licence Agreement. "We are currently evaluating our options with respect to financing the project," Mr Madsen said.

When fully operational, the container terminal having a quay length of 712 metres will be equipped with 8 ship-to-shore gantry cranes, 3 rail-mounted gantry cranes, 29 rubber-tyred gantry cranes, reach stackers, empty container handlers, trucks and chassis.

Once the third box terminal becomes fully operational, JNPT's container handling capacity will be enhanced to about 3.7 million TEUs per annum. During 2003-04, the Port had handled 2.27 million TEUs, representing about 58 per cent of the container traffic handled at the 12 major ports in the country.