The Hindu Business Line : PSA-Sical set to bag Chennai box terminal project

Big venture
The project will be put up at a cost of Rs 492 crore.
The Chennai port will contribute around Rs 100 crore for the project.
The project involves developing a second container terminal.

Chennai , Sept. 4

PSA-Sical, a joint venture between PSA Singapore and the Chennai-based Sical Logistics, is set to bag the second container terminal project at the Chennai port to be put up at a cost of Rs 492 crore. The consortium operates the Tuticorin Container Terminal.

The company quoted 45.801 per cent as its revenue share for the project. In other words, for every rupee the company earns, it will pay 45.801 paise as revenue to the Chennai Port Trust.

The Chennai Port Trust will contribute around Rs 100 crore for the project towards dredging and reclaiming land, and the remaining amount is to be brought in by the BOT (build, operate and transfer) operator.

Waiting for nod

The offer of the company will now be placed for approval of the port trust board and later forwarded to the Centre for final approval and award of licence.

"We should be able to issue a letter of intent to the private operator by this month end," said sources.

Out of the 11 bidders, four — AP Moller Terminals of the Netherlands, PSA-Sical, Emirates Trading Agency LLC Dubai and Larsen & Toubro with Hutchison Port Holdings Ltd, Hong Kong, as management contractor — were short-listed.

The bid of AP Moller was not found responsive to the bid requirements and the Centre did not give security clearance to Hutchison.

ETA's bid did not meet the minimum acceptability tender criteria.

This left PSA-Sical as the front-runner for the project, said sources.

More work

The project involves developing a second container terminal at the modernised east quay and south quay. Chennai Container Terminal, the existing private terminal, achieved a record throughput of 7,00,107 twenty foot equivalent units (TEUs) for the calendar year 2005.

Once the second terminal comes up, the port can handle an additional 1 lakh TEUs in the first year and 6 lakh TEUs within five years of operation.

The port trust has also obtained the Coastal Regulation Zone clearance from the Environment and Forest Ministry for the first stage reclamation work to create an additional open storage area.

The Rs 10-crore project will serve as a back-up area for the second container terminal, the source said.

Container cargo at the port exceeded the handling capacity of the existing 6 lakh TEUs per annum, and construction of a second terminal was envisaged as part of the National Maritime Development Project.

The capacity of the second terminal is likely to be 8 lakh TEUs per annum, said sources.