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Adani Ports and Special Economic Zone Ltd, JSW Infrastructure Ltd, Essar Ports Ltd, Jindal Steel and Power Ltd, and Navayuga Engineering Company Limited have filed the initial bids to build a 25-million tonne (mt), deep draft dry bulk cargo terminal at the Centre-owned Paradip Port, at an investment of ₹2,392.13 crore.
The Paradip Port Trust is India’s second-biggest state-owned cargo handler by volume. The project is part of the port trust’s plan to expand capacity.
The private operator winning the deal will develop, operate and maintain the terminal for 30 years. The task of deepening the Western Dock basin and the navigation channel up to the berths, including the turning circle for the handling of Capesize vessels, will vest with the terminal operator, according to the tender documents.
The terminal will be built in two phases of 12.5 mt capacity each. The construction period for Phase 1 will be 36 months from the date of the award of the concession. The construction work for Phase 2 will begin from the date Phase 1 starts commercial operation, and has to be completed within 24 months.
Minimum royalty
The Paradip Port Trust will set the minimum royalty per metric tonne (reserve royalty price) while inviting price bids. The project will be awarded to the bidder quoting the highest royalty per metric tonne above the reserve royalty.
The royalty rate will be escalated year on year based on the Wholesale Price Index (WPI).
The private operator will have to handle a minimum guaranteed cargo (MGC) of 8.75 mt and 17.5 mt for Phase 1 and Phase 2 of the project, respectively.
It will have to pay the contractually mandated royalty amount for the MGC along with damages if it fails to achieve the MGC in a year.
“It’s a very important project for Paradip Port because it needs additional capacity,” a Port Trust official said.
Four private terminals
Paradip Port has four private terminals — a 10-mt coal import terminal; a 10-mt iron ore export terminal; a 5-mt multi-purpose berth to handle clean cargo including containers, and a 30-mt mechanised facility. In FY21, the port handled 114.549 mt of cargo.
The planned terminal will cater to the requirement of coal and limestone imports besides the export of granulated slag and finished steel products for steel plants operating in the hinterland of Paradip Port.
The demand for import of coking coal and fluxes and export of finished steel products have been rising from the steel mills, necessitating capacity creation, the official said.
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