A consortium led by Bollore Africa Logistics SAS have secured interim relief from the Madurai bench of Madras High Court to participate in the bid for a new container terminal at Centre-owned V O Chidambaranar Port Authority (VOC Port).

In January, the Bollore Africa Logistics consortium filed a petition in the Madurai bench seeking to overturn its disqualification from the bid process by VOC Port. The petition was rejected by a single judge bench of the court on 10 January.

The consortium appealed against the single judge bench order before a division bench, which ordered VOC Port on 17 February to permit the team to participate in the bid process, till the case is settled.

The division bench observed that “prima facie, there is legal perversity” in VOC Port’s decision to disqualify the Bollore Africa Logistics consortium from the bid, noting that the exclusion “may be unsustainable”.

VOC Port has called global bids for converting a bulk cargo berth No 9 into a container terminal, the third such facility at the port to handle cargo containers.

The consortium comprises Bollore Africa Logistics, India Ports and Logistics Pvt Ltd and Highgate Terminals Pvt Ltd.

India Ports and Logistics is a joint venture 51 per cent owned by Star Ports Ltd, a unit of Mumbai-listed Starlog Enterprises Ltd (earlier known as ABG Infralogistics Ltd), and 49 per cent by Bollore Africa Logistics.

Cumulatively, Bollore Africa Logistics will hold a 63 per cent stake in the bidding consortium for the VOC Port tender.

The same consortium also runs the Dakshin Bharat Gateway Terminal Pvt Ltd from Berth No 8, one of the two container terminals at VOC Port.

The other facility at Berth No 7 in VOC Port is run by PSA Sical Terminals Ltd, 51 per cent owned by PSA International Pte Ltd, a unit of Temasek Holdings Pte Ltd, the sovereign wealth fund of Singapore.

The privatisation of Berth No 9 into a container terminal with an investment of Rs 434.17 crore will boost VOC Port’s container handling capacity by 6 lakh twenty-foot equivalent units (TEUs) a year to 1.8 million TEUs a year.

Adani Ports and Special Economic Zone Ltd (APSEZ), DP World Ltd, JSW Infrastructure Ltd, Essar Ports Ltd, International Cargo Terminals and Infrastructure Pvt Ltd (JM Baxi Group) and Bothra Shipping Services Pvt Ltd are in the fray for the project.

Volumes handled

In FY21, the two container terminals at VOC Port handled a combined 7,62,251 TEU’s from 8,04,584 TEUs in FY20.

Between April and January of FY22, the two terminals handled 6,56,000 TEUs from 6,09,000 TEUs a year earlier and 6,70,000 TEUs in FY20 (pre-covid year).

Port industry sources, though, are sceptical of VOC Port’s move to develop a new container handling facility in the face of declining volumes.

In December 2021, the two terminals handled 67,017 TEUs of which Dakshin Bharat Gateway Terminal (DBGT) accounted for 53,709 TEUs. The container volumes at VOC Port declined to 63,166 TEUs in January 2022 of which DBGT’s share also dropped to 46,573 TEUs.

In February, DBGT’s volumes is expected to decline to some 42,000 TEUs and recover to about 44,000-45,000 TEU’s in March, even though the last quarter of fiscal years are typically peak months for container terminals, a shipping industry source said.

“When the existing two terminals are finding it difficult to be financially viable, what is the point of setting up a third terminal. VOC Port should dredge the port’s channel to 16 metres to attract mainline vessels to become a transhipment hub from a feeder port for Colombo,” the source said.

VOC Port currently has a depth of 12.8 metres.

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