India mulls changes to Chabahar port tender

India mulls changes to Chabahar port tender

The Chabahar port development has faced several setbacks over the years.

Indian authorities are reportedly considering changing tender terms for the selection of a private partner to operate and manage marine facilities at the Chabahar port in Iran after feedback from interested participants made them wary that shortlisted organizations might pull out at a later stage, putting all other plans to kick-start operations at the Persian Gulf port in limbo.

“There is a need to incentivize the bidders as they may withdraw in difficult circumstances,” a Ministry of Shipping official told JOC.com.  

The official said four companies have met pre-selection conditions under the new tender and that they are awaiting security clearance before being shortlisted to proceed to the second round of the process.  

The official also said the prequalified bidders are leading domestic players, but refused to name them.

However, he said the crux of the contract renegotiation would involve bidder concerns over minimum throughput guarantees — said to be 30,000 TEU in the third year of operations and 250,000 TEU in the 10th year for containerized traffic — and upfront fees in the initial period of operation.  

India had to scrap the first tender for a private operator of the port that New Delhi views as critical to its energy security after Essar Ports, one of the two domestic port infrastructure developers pre-qualified alongside Adani Ports and Special Economic Zone, failed to meet security requirements.

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, according to the request for qualifications notice issued by India Ports Global (IPGL). IPGL is a special-purpose company set up with equity participation from the ports of Jawaharlal Nehru Port Trust and Kandla, India’s major public ports on the West Coast.

The Chabahar port plan, which was approved by the Indian government in October 2014, received a push when Prime Minister Narendra Modi announced a $500 million investment in the project during his visit to Tehran in May 2016. Shipping & Transport Minister Nitin Gadkari during a recent visit to Tehran also reiterated New Delhi’s commitment to developing the Chabahar port and vowed to speed up the awarding of contracts for cargo-handling equipment, including four rail-mounted quay cranes from Chinese manufacturer ZPMC.    

Under a concession agreement signed in May 2016, IPGL offered to refurbish a 640-meter (about 2,100 feet) container-handling facility with deployment of new service equipment, including 16 rubber-tire gantry cranes, two reach stackers and two empty handlers; and revamp a 600-meter multipurpose terminal with six mobile harbor cranes, 10 forklifts, and 10 trailers. The rebuilt harbor is designed to have a draft of 14 meters and a 70-hectare (173 acres) back-up area.  

That agreement had an 18-month completion timeline for the first phase of the port development, but ongoing delays associated with the selection of a private partner could throw all those plans off track.