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Ennore port project: Private player can build at one go or in phases - 2013-06-12

In what could be a trendsetter for major ports, Ennore Port Ltd. has allowed the private sector to decide on how to go about developing a new container terminal project. Typically, the ports give the directions and the private sector follows them.
However, in reviving the project, the country’s only corporate port has left it to the successful bidder to either build the entire terminal in one go or in phases. “They will take a call depending on the market conditions,” said a port official who did not wish to be named. Having burnt its fingers the previous time, Ennore Port is not taking any chances this time around in the ambitious project costing around Rs 1,270 crore.The revival plan to develop a container terminal has attracted 11 companies.
The port had earlier selected container terminal operator Bay of Bengal Container Terminal’s consortium to operate the terminal. But, the contract was terminated in October over delays in finalising funds. The port lost nearly two years to build the terminal, only to witness the development of a terminal at the adjacent Kattupalli Port by Larsen & Toubro. While three Indian companies – Larsen & Toubro, Gammon and Sical – are in the fray, the list is packed with multinational names such as A.P. Maersk, DP World, Port of Singapore Authority, CMA-CGM, United Liner, Samsung C&T and John Keels Holdings Plc, the official said.

The project will be given on a design, build, finance, operate and transfer model instead of a build, operate and transfer model. Similarly, the private player will have the option of building the terminal in two phases as against the earlier direction of building one single block of 1,000 metre long berth.

Considering the global economic slowdown, the companies feel that the development is easier done in phases. “This is a major change in our thinking. We wanted the market to decide what is good for them and the trade. It is purely a market-driven project,” the official said. However, everything is within the purview of the Tariff Authority for Major Ports, which sets the tariff for major ports, he clarified.

According to sources in Ennore Port Ltd, bidders should plan for a quay length of 730 metres to handle around 1.4 million 20 foot equivalent units at a cost of around Rs 1,270 crore that could be in phases.

The port wants to award the contract by December. From then on, it will take nearly two-and-a-half years to start operations, the official said.

Source: The Hindu Business Line