The parameters for qualification would include experience in managing a similar facility. The experience would be measured by the amount of similar cargo handled by the private operator during the immediately preceding three completed years. The aim would be to involve only serious parties which have a long-term commitment to the port sector.

The bidders should be either established operators who are legally and financially autonomous entities operating under commercial law (terminal operating companies) or promoters/sponsors of such terminal operating companies holding at least 50 per cent equity stake in such companies.In case the bidder is a consortium, it must include a member belonging to one of the above two categories.

The financial parameters for selection would include ability of the bidder to raise resources for the project and to contribute equity through internal sources to the project.

Financial strength can be gauged from the bidder's net worth. In a report which forms the basis of government policy, Infrastructure Development Finance Company Ltd (IDFC) pointed out that bidders are not willing to expose more than 15-20 per cent of their net worth to a single project. If this level corresponds to 50 per cent of the project cost, bidders can raise the entire equity for the project even at a conservative gearing of 1:1.

Therefore, IDFC was of the view that it could be stipulated that 20 per cent of the net worth (combined in case of a consortium) should be at least equal to 50 per cent of the estimated project cost.

Resourcefulness of the company can be judged from its net cash accruals. IDFC made a case of for stipulating the aggregate net cash accruals of the bidder or bidding consortium over the immediately preceding three-year period should at least be equal to 50 per cent of the project cost.After qualification, short-listed bidders would be required to submit proposals in two parts-technical and price.

The technical proposal would be evaluated to assess its adequacy with regard to the project requirements. It should ensure conformity with pre-specified project requirements, mentioned in the bidding document. IDFC suggested that they could be classified into implementation, financing, marketing, operations and maintenance, environmental and organisational plans.

To evaluate the price proposal, the percentage of gross revenue from the project operations earned by levy of tariff that the bidder would commit to share with the port trust would be the sole criterion.

While the bidding framework has been developed for projects involving berth construction and leasing of assets, with certain modifications, the same will be adopted for other projects as well.