Comments
Mumbai-listed Jindal Steel & Power Ltd (JSPL) placed a royalty price bid of ₹54 per metric tonne (mt) to emerge the successful bidder for building a 25-million tonne (mt) capacity, deep draft, dry bulk cargo terminal at the Western Dock of the port with an investment of ₹2,392.13 crore.
Paradip Port Authority, India’s second biggest State-owned port by volume handled, had set a minimum royalty (reserve royalty) of ₹46 per metric tonne while inviting price bids. The tender will be awarded to the bidder quoting the highest royalty per metric tonne above the reserve royalty. The winning bidder will have freedom to set market-driven rates.
The royalty on each metric tonne of cargo handled at the terminal, to be paid to the port authority, will be escalated year-on-year based on the Wholesale Price Index (WPI).
Essar Ports quoted ₹51 per metric tonne as royalty while Navayuga Engineering Company placed a price bid of ₹49.2 per metric tonne, officials said.
No investment from port
“The highest royalty per metric tonne quoted by JSPL is a reasonably good price,” said a port industry official. “The port authority will not make any investment in the project but will offer land to the private operator. Besides, it will collect port dues and pilotage charges from ships calling at the terminal,” he said.
The private operator will levy berth hire and cargo handling charges from users of the facility.
The private operator 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.
Agreement details
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 must be completed within 24 months.
The project will use the new model concession agreement that was finalised by the Ministry of Ports, Shipping and Waterways in November last year. The private operator will have to handle a minimum guaranteed cargo (MGC) of 8.75 mt and 17.5 mt a year 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.
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.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.