No takers for NTPC river transport deal

| | Updated on: Sep 11, 2015
image caption

Potential bidders blame tough clauses; hits waterways development project

NTPC’s contract for river transportation of imported coal from high seas straight to Barh (near Patna) is the cornerstone of the National Waterway-I development project. But the problem is there are no takers.

Not one transporter — including Jindal ITF that trans-loads coal at high seas and moves it up the river till Farakka — is ready to bid for the contract that will entail moving coal some 700 km up the Ganga from the Bay of Bengal.

“We surely are interested in the project. But the tender needs to be free from some structural deficiencies,” said a source in one of the logistics companies.

For example, he said, as per the last tender, the transporter will be penalised for any delay in getting Customs clearance, which is the responsibility of the fuel importer.

Also, the transporter is required to build a terminal at Barh and move the fuel through a covered pipeline to the NTPC plant located 2 km away.

Recovering the capital expenditure within the 7-10-year contract tenure will erode the cost advantage of river transportation.

Advantage Adani? But, according to another transporter, the real reason for the reluctance to participate in the deal is a clause that says that the prospective bidders should have a port and route the cargo through the facility. Transporters allege this suits only one party — the Adani Group.

Adani imports coal for NTPC, has a port at Dhamra in Odisha that can accommodate large vessels, and is currently transporting the fuel by rail (from Dhamra) to NTPC plants.

“Adani has control over the entire logistics chain and can easily outbid anyone on the transportation contract,” a transporter told BusinessLine .

Transporters had wanted this clause removed, but with no action on their request, they are not bidding. Incidentally, Adani too has stayed away from bidding.

Adani and NTPC spokespersons didn’t respond to queries but sources in the Inland Waterways Authority of India (IWAI), which is managing the transportation tendering for NTPC, admitted that the clause should have been avoided. They blame the power major for its inclusion.

Earlier tenders The IWAI is determined to ensure wide participation in its third attempt to award the contract. The tender is to be floated anytime.

In the first tender, in 2014, the Jindals emerged the lowest bidder. But the tender was cancelled as it overshot NTPC’s cost estimation.

At least 10 infrastructure majors, including Tata Logistics, Adani, Shapoorji Pallonji and Mercator, participated in pre-bid meetings ahead of the second tender, in May 2015. At the request of the potential participants the IWAI even postponed the deadline for submitting bids thrice. But, finally, no one participated.

As the IWAI prepares to float the third tender, none of the players BusinessLine contacted confirmed participation in the project.

Published on January 22, 2018

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like

Recommended for you