The Singapore-based Port Operator, PSA International Pte Ltd, and the ABG Group might get another chance to bid for building the Jawaharlal Nehru Port Trust’s (JNPT) fourth container terminal, even after the consortium failed to sign a concession agreement almost a year after winning the contract.

This led to delay in execution of the project and a possible cost over-run.

The PSA-led consortium (with ABG as its partner) failed to sign an agreement to undertake the work on the project, after ABG withdrew from the mega container terminal project, a year after getting the award.

The 4.8 million container capacity project was to be built on a design, build, finance, operate and transfer basis.

The consortium had emerged as the winner of the bid in September 2011, after it agreed to share 51 per cent of the revenue with the JNPT. The second largest bidder, Vedanta, agreed to share only 35 per cent of the revenue.

“As long as they are not blacklisted, they will be allowed to bid again. Why not? We want more and more competition. There are not too many players in the port sector,” G.K. Vasan, Union Minister for Shipping, said at a conference earlier this week to a question if the two bidders will be allowed to bid again.

To be sure, the JNPT has en-cashed the bank guarantee from the consortium.

“We have already en-cashed the bank guarantee of the previous bidder, as per the terms of the bid,” P.K.Sinha, Shipping Secretary said.

However, the bank guarantee is a mere one per cent of the total estimated cost of the project, said a highly place industry official, who did not wish to be named.

According to the official, the one per cent clause as provided in the bid is hardly a deterrence.

“For some party to come and cause hindrance to the project, this is a very small cost to pay,” he said.

The JNPT en-cashed about Rs 67 crore from the bank guarantee of the PSA-led consortium, the successful bidder of the then estimated Rs 6,700-crore project.

The JNPT board has now decided to split this mega terminal project into two. They will issue fresh bids shortly and award the project in the next few months.

“We gave them enough time. ABG wanted to withdraw and the bidding documents do not permit withdrawal after the award of the project. Therefore, despite the fact that we gave them sufficient time, they did not agree to sign the concession agreement.

“So we were constrained to cancel the award and re-bid, which will be done by the JNPT very soon,” Sinha said.

(This article was published on January 11, 2013)
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