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Saturday, September 09, 2006

PSA-SICAL likely to develop second terminal

PSA-SICAL, Tuticorin container terminal operator, is set to bag the project to develop and operate the second container terminal at the Chennai port.

This looks imminent after the Chennai Port Trust opened the consortium's price bid for the project, to be developed on a build, operate and transfer basis, on Monday.

PSA-SICAL has offered a revenue share of 45.801 per cent or around 46 paise on every rupee it earns to the Chennai port.

The quote of the consortium is higher than the 37.128 per cent revenue share agreement between the port and Chennai Container Terminal Limited, which operates its existing facility.

It is bound to come as a surprise to those in the shipping industry, who while supporting the case for such a facility to be established in the Ennore terminal first, had raised doubts about the second terminal at the Chennai port fetching more revenue.

Chennai Port Trust Chairman K. Suresh, however, said the quote of PSA-SICAL was an indication of the tremendous growth potential in the business. A sign of this was that the existing terminal handled 80,000 containers last month as against its monthly average of 57,000, he told The Hindu on Monday.

As for the selection process, he said that in response to the request for qualification the port called in May last year for the Rs.492-crore project, 11 bidders had responded. All qualified for the next round involving submission of the Request for Proposal (RFP) bids.

Four bids were received in response to the RFP, and the technical bids opened last November. The bid of AP Moller Terminals of the Netherlands was "found not responsive to the bid requirements."

The Centre did not give security clearance for Hutchison Port Holdings, which had bid for the project with Larsen and Toubro.

The Emirates Trade Agency, the third bidder, did not meet the minimum acceptability tender criteria.

This left PSA-SICAL, and its price bid was opened on Monday. The offer of PSA-SICAL would be placed for formal approval of the Port Trust board and then forwarded to the Government.

The letter of intent was likely to be issued within two weeks.

Elaborating on the revenue share quoted by the consortium, Mr. Suresh said the hinterland growth and that of container traffic in the southern region could be major drivers.

The proposed terminal, in which the port would be investing Rs.100 crore, could emerge as a major transhipment hub.

About the measures to facilitate faster road movement of cargo boxes from and to the port, he said the National Highway Authority of India would take up a feasibility study for an elevated corridor from the port gate near the war memorial to Maduravoyal.

Source: The Hindu

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