The signing of agreement for the much-delayed fourth container terminal project at Jawaharlal Nehru Port Trust (JNPT) has been delayed for several months now. Now, a bank guarantee of Rs67 crore the winning consortium of Singapore-based PSA International and ABG Private Ports Ltd furnished as bid deposit after bagging the deal is expiring next month. JNPT chairman L Radhakrishnan said the bank guarantee would be extended for six months.
A definite timeline for the deal, meanwhile, remains uncertain.
PSA-ABG which had bagged the project in September last year did not signed the concession agreement last month citing stamp duty issues, missing the signing date for the third time.
The 4.8 million twenty-foot equivalent unit (TEU) per annum capacity fourth container terminal project is to be developed in two phases at a highest revenue share offer of 50.8% till date.
The new date of signing the agreement has not been decided as PSA now seeking adjudication from the Maharashtra government to ascertain the quantum of chargeable duty.
Radhakrishnan said, “Bank guarantees should not be an issue and it would be extended. They (PSA) have assured us they are going ahead with the other requirements like tie-ups for funds and other requirements to ensure not much time is wasted. “
The container terminal’s success hinges on timely completion of the dedicated freight corridor (DFC), which is significant for evacuation of container traffic on the land side. Top JNPT officials conceded if the DFC does not come up it will be a huge risk for PSA-ABG.
At the agreed revenue share, sources say, the project could be commercially unviable, due to competition from two existing two private terminals, debt servicing costs and tariff fixations, but may hold strategic value for PSA.
“In case PSA wants the terminal in order to establish presence at JNPT, then it is a strategic decision, wherein in the port operator may have taken into consideration losses that might emerge for the strategic presence.”
JNPT which handles 56% of the country’s container volumes is operating at higher capacities and needs to increase it.
Comments