Plans to build a $1.5 billion container terminal at the Port of Jawaharlal Nehru (Nhava Sheva) got back on track after the consortium of Singapore’s PSA International and India's ABG Group received the contract from port management.
The fate of the terminal that will double the capacity of India’s largest port was uncertain in recent months, due to a string of litigation filed by disqualified bidders. The project, considered largest foreign direct investment in the Indian port sector, will double the port’s capacity to 8 million 20-foot container equivalent units from 4.1 million TEUs.
The terminal is one in a series of capacity improvement plans that the port authority has lined up for implementation over the next 10 years with an anticipated total investment of about $3 billion to handle a projected significant growth in traffic volume. The port's congestion has spurred ocean container carriers to impose bottleneck surcharges and shippers to divert cargo to other ports.
Projects in the pipeline include development of a fifth terminal, for which the authority recently called for bids from global engineering consultants for preparation of master plans.
Nehru currently has three container terminals, which cumulatively handled about 4.3 million TEUs in fiscal 2011 ended March 31. According to latest estimates, traffic is likely to reach 11 million TEUs by fiscal 2016 and about 23 million TEUs by 2025.
The PSA-ABG consortium, which operates container facilities at the ports of Calcutta and Kandla, will offer a 50.8 percent share of revenue as annual royalty to the landlord port. PSA also operates a terminal at the southeastern Port of Tuticorin in a joint venture with Chennai-based Sical Group.