The shipping ministry has issued stricter norms on the prospective bidders for public private partnership projects in major ports to prevent private monopoly in the sector. The fresh policy is also aimed at reducing the number of court cases and expediting the award of projects envisaged under the National Maritime Development Programme (NMDP).
As per the new guidelines, the private operator of a cargo terminal in a major port cannot bid for another terminal for the same cargo within the port. In addition to this, the norms also limit the number of build, operate and transfer projects that a private player can have at a port. To ensure that this is not subverted in maritime states, these limitations will apply to the player?s operations in all ports within a radius of 100 km of the major port.
?An existing private operator of the port is allowed to bid for the project, only if, with the award of the project, the operator does not have more than two BoT projects, i.e. container terminal or berths or single point mooring or SEZs etc, at the port or any port within a radius of 100 km of port limits,? the draft policy document states.
The Financial Express had first reported on December 31, 2009 that the government was preparing a tough policy to reduce litigation by bidders of maritime projects. As per the earlier policy, the operator of any one terminal at a major port was barred from bidding for another platform being awarded immediately after the first one. But the policy could not prevent a flurry of litigation from private firms. ?There have been various cases in the past, which hampered the award of contracts. We have further sharpened the existing norms to prevent such situations in the future and stop private operators from having a monopoly in a port,? Rakesh Srivastava, joint secretary in the Shipping Ministry, told FE. The ministry has invited comments from stakeholders within 15 days, after which the guidelines will be notified. The RFQ and RFP documents for port projects will change accordingly.
Despite the earlier policy, firms including Gateway Terminals India Pvt Ltd, P&O Australia and PSA-Sical dragged the government in various courts, seeking permission to bid for more projects. Although, the government won most of the cases, delays in award of PPP projects could not be avoided.
In the latest case of Ennore Port, private bidders that were barred from bidding for Rs 1,407-crore container terminal at the port, there was a delay of more than a year. The project was to be awarded in 2008-09, but some private consortia challenged the port management?s decision to bar them from bidding in the Madras High Court.
Under NMDP, a public-private participation programme to increase capacity of the 12 major ports to nearly 1,000 million tonne (MTs) a year by awarding 276 projects by March 2012, work has completed on 47 projects while work on 71 projects is on. As an evidence of slow progress of NMDP, the major ports had a capacity of 574.77 MTs by mid-November, against the target of 650.9 MTs per annum by December-end.
The policy also puts in a clause defining the operator and its associates. ?Operator includes consortium members or its associates. Associates mean, in relation to the applicant/consortium member, a person who controls, is controlled by or is under common control with such applicant/ consortium member. As used in the definition, the expression ?control? means with respect to a person which is a company or corporation, the ownership, directly or indirectly, or more than 50% of the voting shares of such person, and with respect to a person which is not a company or corporation, the power to direct the management and policies of such person by operation of law,? it states.