Local agents of container lines have expressed skepticism and concern over a decision by India’s Port of Jawaharlal Nehru to develop its fourth container terminal project with “one mega terminal” instead of two separate facilities.
“We apprehend that the mega terminal would excite interest from ‘fewer’ bidders as it would be a more expensive undertaking, take twice as long to execute and grant monopoly status, at least for a limited amount of time, to the winning bidder,” the Mumbai-Nhava Sheva Ship Agents’ Association said in a communiqué to port chairman.
The move comes after the port authority issued a new request for qualification from interested bidders for the public-private partnership project, which hit a roadblock in September 2012 when successful bidder PSA International pulled out of Nehru’s initial tender.
“In the light of the experience with the PSA-led consortium, splitting the project into two (terminals) would substantially reduce the risk of failure or default by a single PPP partner,” the association said. “The most significant benefit of the two-terminal concept is that it could become operational much faster.”
The agents’ group said that following the PSA bid collapse, the Nehru board of trustees had considered a proposal to split the project into two terminals, but the restructuring plan was reportedly not approved by the government.
“With two terminals, the port would be encouraging healthy competition between the operators to the benefit of its users and the port itself,” the agents said.
The mega project comprises one terminal with a berth of 1.2 miles and capacity of 4.8 million containers a year, requiring an estimated investment of $1.4 billion.
The deadline for submission of responses to the new RFQ is July 19, and the port plans to hold a pre-bid meeting with prospective organizations July 5 to clarify possible queries.