The Hindu Business Line : Five cos bid to develop Orissa Gopalpur port

FIVE companies — BHP Billiton of Australia, Malaysia's Integrax Berhad, Larsen & Toubro, Infrastructure Leasing & Financial Services Ltd (IL&FS) and Orissa Stevedores — have responded to the global tender floated by the Orissa government to develop the seasonal minor port at Gopalpur into a major all-weather port on a build-own-operate-share and transfer (BOOST) basis.

The State government has appointed Rail India Technical and Economic Services (RITES) as the advisor for the port project. RITES will short-list from the five that have submitted their request for qualification, industry sources said.

The short-listed bidders will be asked to submit their technical and financial bids for evaluation by RITES for final selection. RITES will send its evaluation report to the State government that will be considered by a high-power committee, headed by the Chief Secretary of Orissa. The State government is expected to take a final decision on selection of the port developer by the year-end or early 2005.

The concession agreement with the private developer will initially be for a period of 30 years, with a mutually agreeable extension of another 20 years. The successful private operator will have the freedom to fix and revise tariffs for the services offered at the port as Gopalpur is a minor port and hence, does not come under the purview of the Tariff Authority for Major Ports.

Under the BOOST format, the bidder quoting the highest percentage from its gross revenues earned from port operations to be shared with the State government will win the contract. South Korea's Pohang Steel Corporation (Posco) proposed a joint venture with BHP Billiton to set up a 10-million-tonne steel plant in Orissa at a cost of $8 billion, which is billed as the biggest-ever FDI proposal in India.

BHP's interest in developing the Gopalpur Port comes in the wake of reports that its joint venture partner for the proposed steel plant, Posco, may prefer Brazil over India, since there are a number of deep-water ports in Brazil that can accommodate large bulk carriers, thus reducing shipping costs for the project.

Following this, the Orissa government offered Posco the option to invest in the deep-water port under construction at Dhamra. The possibility has been discussed and is likely to be explored further in the coming months, a State government official said.