Adani, JM Baxi and JSW Infra in race for Chabahar port deal

Adani Ports and Special Economic Zone Ltd (APSEZ), JM Baxi Group and JSW Infrastructure Ltd have been short-listed on a tender floated by India Ports Global Ltd to manage, operate and maintain (MOM) the container and multi-purpose terminals at Chabahar port in Iran, which was partly opened a few days ago.

India Ports Global, a 60:40 joint venture between Jawaharlal Port Trust and Deendayal Port Trust (previously Kandla Port Trust), was set up by the government to make strategic investments in overseas ports.

India Ports Global and Aria Banader Iranian Port signed a deal in May 2016 to equip and operate the container and multi-purpose terminals at Shahid Beheshti – Chabahar Port Phase I – at a capital investment of $85.21 million and an annual revenue expenditure of $22.95 million on a 10-year lease.

Accordingly, India Ports Global will select a strategic private partner to manage, operate and maintain the container and multi-purpose terminals for 10 years.

Fees

The MOM contract will have a fixed management fee and a variable management fee. The bidder quoting the lowest variable management fee from IGPL will win the deal.

The MOM partner will be finalised by March 31, 2018, a Shipping Ministry official said.

The successful MOM partner will have to incorporate a special purpose vehicle (SPV) in Iran with a local private partner. This SPV will take a 10 per cent stake in a separate SPV floated by IGPL in Iran to run Chabahar port.

Chabahar port, located in the Sistan-Baluchistan Province on Iran’s South-eastern coast (outside Persian Gulf), is of great strategic importance for the development of regional maritime transit traffic to Afghanistan and Central Asia. The first phase development of the port will have a container terminal with two berths of 640-metres quay length and a depth of 16 metres, and a multi-purpose terminal with a quay length of 600 metres and draft of 14 metres.

The port has a total back-up area of 70 hectares. The construction of both the terminals is nearing completion, and the process of procuring equipment for the two terminals by IPGL is currently under way.

Orders placed

IGPL has already placed orders with China’s Shanghai Zhenhua Heavy Industries Co Ltd (ZPMC) for four new post-Panamax-size rail-mounted quay cranes (RMQCs) for the container terminal. Order for buying 14 rubber-tyred gantry cranes (RTGs) will be placed within a month, the Ministry official said.

IGPL has also called bids for buying two mobile harbour cranes (MHC) of 140 tonnes and four MHC of 100 tonnes and 32 tractor trailers.

Chabahar port project will be the first overseas venture for Indian state-owned ports such as JNPT and Deendayal.