Decks have been cleared for the V.O.Chidambaranar Port Trust to go ahead with the conversion of general cargo 8th berth at the port to second container terminal at a cost of Rs 332 crore.
This follows the Supreme Court rejecting (in May) the request of PSA-Sical to allow it to bid for the project. The port trust's board today approved the process of qualifying the request for qualification (RFQ) bidders satisfying the qualification criteria, to the second stage (‘request for proposal').
In-principle approval
Last August, the Union Government issued a directive to restrict private sector monopoly in ports. Due to this, PSA-Sical was not allowed to participate for the 8th berth as it was already operating a container terminal in the seventh berth in the same port. Incidentally, the project was the first under the ‘new private sector monopoly' directive in major ports.
It has been nearly six years since the Government first gave its in-principle approval for conversion of the berth number 8. The Shipping Ministry gave its approval in March 2009, but the project was delayed due to various court proceedings.
Security clearance
Following the Supreme Court's ruling, nine companies, including Mundra Port, Essar, ABG, India Port Terminals, IL&FS and Marg, participated in the RFQ issued last August. However, since the case was in the Supreme Court, the tender process was put on hold.
Some of the bidders will more forward to the RFP stage, but their bagging the project is subject to security clearance by the Centre.
The Berth 8 today handles general and bulk cargo, but with the demand for containerised trade growing, the authorities decided to convert the berth into a container berth – to be put up by a private sector company on ‘build, own and transfer' basis.
‘Restriction good'
Mr K. Ravichandran, Senior Vice-President, ICRA Ltd, who tracks the infrastructure sector, said the monopoly restriction of the Government was good for the trade as it will bring in competition among private players in the same port. The Chennai port is a good example of two global private operators – DP World and PSA – fighting for share of the growing container trade, he said.
According to the business plan of the VOC Port (formerly, Tuticorin port), the container traffic forecast for 2014-15 will be 1.47 million TEUs (20-foot equivalent units). This is against the present capacity of 0.41 million TEUs in the present container terminal at berth 7 operated by PSA-Sical.