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i-maritime news letter

JN Port terminal: Why the signing ceremony was called off - 2012-01-18


Port and shipping circles were surprised by the last minute decision to defer the signing ceremony of the concession agreement for building the fourth container terminal at Jawaharlal Nehru Port. The agreement was to be signed on Wednesday in Delhi between the JNPT and the consortium, led by PSA International of Singapore, which was awarded the project three months ago. The event, which was to be graced by the Shipping Minister, Mr G.K. Vasan and dignitaries from Singapore, was called off as PSA sought more time to sort out the issues regarding payment of stamp duty.  “The proactive measures taken by the government have ensured that natural advantages are not wasted. This has helped Gujarat to become the number one maritime state in the country,” he said.

According to news reports, PSA refused to bear the full stamp duty for registering the document. PSA wants the JNPT to bear part of the cost. Reports indicate the stamp duty for the Rs 6,700-crore project would be about Rs 50 crore. The consortium of PSA of Singapore and ABG Port of India was chosen through competitive bidding in July after it quoted the highest revenue-share of 50.8 per cent — the highest by any private port in the country. The project was awarded in September 2011. The parties had more than three months to sort out all issues.

The Singapore company's stand is that it bagged the project after agreeing to share more than 50 per cent of the revenue from the project with the Government. But port officials said that it is normal practice in public-private partnership (PPP) projects that the stamp duty is paid by the developer.  Analysts believe that having overbid for the project, PSA is now trying to extract whatever concession is possible from the landlord port.

With this, the project, which dragged on for years due to disputes and litigations, will be delayed further, upsetting the JN port's development programme. Going by the way things are happening one after another, delaying the project, one tends to agree with the pessimists' view that the fourth terminal at JN port is a jinxed project.

Source: Hindu Business Line