It might be third time lucky for Chennai Port?s R3,800-crore mega container terminal project, on the backburner for nearly three years now. The port authorities will be re-bidding once again with a view to doubling the capacity ? in two different phases ? to 8 million PEUs (20 foot equivalent units).
Chairman Atulya Misra told FE the option of viability gap funding from the central government was being explored. Misra also expects the cost of the project to climb to R5,000 crore due to delays.
The container project, which was conceived six years back, has been delayed due to poor response from the qualified bidders. The port authorities were unhappy with the low revenue-sharing ratio offered by the qualified bidders. Some bidders did not have the requisite security clearances from the government ? Adani Ports is among those that have received the clearance.
?By opting for viability gap funding we will be able to reduce the risks for the private partners associated with the project, which will help in increasing private participation. We are also looking at the option of opening the terminal to other kinds of commodities, like grain and iron ore, rather than using it only for containers,? Misra said.
In private public partnership (PPP) projects where the financial returns are not high, companies opt for viability gap funding under which the government meets a portion of the cost.
The container project has been bid out twice; in the first round of bidding in January 2011, Chennai port did not receive any bids. In the subsequent round, the port received single-digit revenue share from the bidders ? Adani Ports and Special Economic Zone (APSEZ) ? and the Essar Group but the bids were rejected.
In June this year, the shipping ministry said the project will be restructured to make it attractive to investors by being implemented in two phases.
Meanwhile, the qualifications of bidders for JNPT?s R8,000-crore container terminal project are being scrutinised and the bidding is expected to open soon. The shipping ministry has set a target of awarding 30 PPP projects for R30,000 crore during FY14. During FY13, the shipping ministry awarded 13 PPP projects at a total cost of R2,274 crore, only about 20% of the year?s target.
Shipping companies expect that the new set of tariff guidelines would boost private sector participation in the sector. The shipping ministry in July announced a new set of guidelines for determining tariffs at major ports, under which the ports are allowed to charge a maximum of 15% above the ceiling rate that would be decided by the TAMP.