Tata, Adani, Essar file bids to build captive berths at Paradip port

P Manoj Mumbai | Updated on August 26, 2019

But appraisal panel wants rethink on qualification criteria to woo more bidders

Tata Steel, Adani Ports and Special Economic Zone Ltd (APSEZ) and Essar Ports have submitted initial bids to build captive berths (for own use) at the western dock of Paradip Port Trust with an investment of ₹2,040 crore.

But the port may have to drop the captive route for developing the western dock berths, as the Public Private Partnership Appraisal Committee (PPPAC) has directed the port trust Paradip and the Shipping Ministry to rework the technical qualification criteria to attract more bidders.

Paradip Port Trust and the Shipping Ministry had favoured the captive model as the “ideal option” for developing the western dock berths based on the ‘Captive Policy for Award of Waterfront and Associated Land to Port Dependent Industries (PDI) in Major Ports, 2016’.

The technical qualification criteria for the project were drawn up to facilitate the participation of port dependent industries. A PDI is defined under the captive policy as — “With reference to a particular major port trust, any entity (including any of its affiliates) which is dependent on that major port for import and/or export of at least 70 per cent of the designed capacity of the proposed facility for captive cargo...if the projected cargo requirement for the entity for a period of three years starting from no later than third year of the expected commercial operations date is at least 70 per cent of the designed capacity of the proposed facility for captive cargo, the entity will be classified as a PDI”.

Paradip Port Trust chose the captive model to set up the berths in its inner harbour after Tata Steel submitted a suo moto proposal to the port authority to build the facilities primarily to cater to its Kalinganagar steel plant which is being expanded from 3 mt to 8 mt, a Shipping Ministry official said.

The port authority floated a global tender, seeking interest from other bidders on which APSEZ and Essar applied, he added.

Restrictive criteria

Subhash Chandra Garg, who chaired the July 11 PPPAC meeting as the then Finance Secretary and Secretary, Department of Economic Affairs, said that “the eligibility conditions for bidders seem unduly restrictive, may limit competition, and may not generate interest from bidders unconnected to Paradip Port Trust”.

Whereas, NITI Aayog pointed out that “non-discriminatory access should be there if the port is developed through PPP and bidding should not be restricted only to PDIs”.

Garg said that the Shipping Ministry and the port trust should “undertake a study to ascertain whether the captive berth for PDI would be better than making all port players eligible to compete for the project”.

The PPAC finally decided that the “Shipping Ministry will facilitate the firming up of revised technical qualification criteria by the Project Authority (PPT)”, according to the minutes of the July 11 meeting, a copy of which has been reviewed by BusinessLine.

Published on August 26, 2019

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