Logistics

DP World says no to CAG audit at Vallarpadam terminal

V Sajeev Kumar Kochi | Updated on January 23, 2018 Published on May 19, 2015

The international container terminal in Vallarpadam, Kochi. - KKMUSTAFAH

Claims licence agreement did not provide for such a scrutiny





DP World, the container terminal operator in Kochi Port, has turned down the Centre’s move to carry out a performance audit by the Comptroller and Auditor General (CAG) at Vallarpadam terminal.

The company has clarified that it’s not liable to be audited by the CAG, as such provision was not included in the licence agreement. Since the company does not come under the purview of audit, CAG has no jurisdiction to carry out such audit, they pointed out.

This was conveyed to Cochin Port Trust by DP World in a letter in response to the Shipping Ministry move seeking the concurrence of the terminal operator for the audit.

The operator’s concurrence is mandatory in such cases since the terminal project is in the PPP mode.

A senior official in the port said they have decided to forward the letter to the Ministry for further advice and for taking a final decision in the matter. “We are also examining an earlier case where there is a Supreme Court verdict allowing CAG to audit a PPP project,” he said. The former Rajya Sabha member P Rajeeve, who was instrumental in receiving the Ministry’s nod for the performance audit in the terminal, told BusinessLine that the under-performance of the terminal at 35 per cent of its capacity since its commissioning in 2011 has prompted him to take up the matter in the upper house of Parliament. There were also demands from various quarters on renewing the licence agreement with the terminal operator, he said.

KVA Iyer, Vice-President, Cochin Port Labour Union, said DP World’s consent for performance audit is not required as the apex court had upheld the right of CAG to audit accounts of private partner in public project where revenue is to be shared with the government.

The Ministry’s directive for performance audit is a welcome initiative, as the company has failed to fulfil its assigned task of turning Kochi into a hub port, first at Rajiv Gandhi Container Terminal and later at Vallarpadam.

Meanwhile, a team from Boston Consulting Group was in Kochi on the request of the Ministry to find out the efficiency parameters in all the major ports in India vis-à-vis international standards.

The team will hold discussions with port, ICTT and shipping officials on various issues affecting the terminal and make recommendations on possible remedial measures.

Published on May 19, 2015
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