India hopes tender changes jump-start interest in Chabahar project

India hopes tender changes jump-start interest in Chabahar project

Shipping containers.

The reconsideration comes after none of the three shortlisted applicants responded with a final proposal for the Chabahar project. Photo credit: Shutterstock.com.

India is making a renewed attempt to induce prequalified bidders participing in the long-stalled process to select a private partner for the operation and management of marine facilities at the Chabahar port in Iran.

Local industry sources told JOC.com that various Indian agencies overseeing the redevelopment project, at a recent review meeting, voted to do away with an $8.5-million up-front fee requirement and also revise conditions tied to a $5-million performance bank guarantee by the winning bidder. However, these changes still need government approval before finalization of the contract.

The reconsideration comes after none of the three shortlisted applicants responded with a final proposal, even though authorities pushed back the deadline twice, with the last extension ending April 12.

Sources also said authorities tentatively approved an additional, three-week extension for these bidders to complete the process.

The private participation deal has been under way for more than a year, with the first tender hitting a roadblock after Essar Ports Ltd. — one of the two domestic port infrastructure developers prequalified alongside Adani Ports and Special Economic Zone — failed to secure security clearance.  As a result, that process was eventually scrapped and a fresh tender was floated last July.

Bid winner to undertake comprehensive renovation

The winner will operate and maintain container and multipurpose cargo facilities, as well as design, develop, finance, operate, and maintain any other support infrastructure required for the efficient operation of the project. India Ports Global Ltd. (IPGL), set up with equity participation from the ports of Jawaharlal Nehru Port Trust and Kandla, is the nodal agency for the rebuilding project. 

The Chabahar port plan, which was approved by India’s government in October 2014, took a major step forward when Prime Minister Narendra Modi pledged a $500-million investment in the project during his visit to Tehran in May 2016. Shipping & Transport Minister Nitin Gadkari and other senior officials have also paid several visits to Tehran to reaffirm India’s keen interest in the Chabahar modernization, given the fact that the emerging market nation heavily depends on Iran for its burgeoning energy needs.    

The concession deal between IPGL and the Iranian side calls for the upgrade of a 640-meter (2,100-foot) container-handling facility with deployment of new service equipment, including 16 rubber-tire gantry cranes, two reach stackers, and two empty handlers. Also, a 600-meter multipurpose terminal will be renovated along with six mobile harbor cranes, 10 fork lifts, and 10 trailers. The rebuilt harbor is also designed to have a draft of 14 meters and a 70-hectare (173-acre) back-up space.  

As India’s contract awarding difficulties continued, Iranian authorities at the end of last year launched the first phase of operations at Chabahar, with total capacity increasing from 2.5 billion tonnes (2.8 billion tons) to 8.5 billion tonnes.