Shipping ministry may miss target to award public-private partnership expansion projects

Ministry of Shipping is likely to miss the target of awarding 21 expansion projects at major ports, including JNPT in Mumbai, on public-private partnership (PPP) basis in the current fiscal, owing to delay in security clearances, as well as legal hurdles.

The 21 expansion projects at the major ports required an investment of Rs14,000 crore.

Till date, however, the ministry has been able to award only two PPP expansion projects at Tuticorin Port and Ennore Port worth `1,100 crore, registering less than 10% of the target for the fiscal. Major ports are the twelve projects directly under the control of the central government.

Confirming the slow implementation of the project award, a senior shipping ministry official said, “We may end 2011-12 at around 700 mt (million tonne) capacity creation against the targeted one billion mt mark by that time.”

Sharing the details, the official added, “We have not yet received the security clearances in case of twelve projects from various agencies such as the home ministry, and the defence ministry. Only after the clearance is obtained, we will be able to proceed with the request of qualification (RFQ) procedure.” The official, meanwhile, said that the required approvals are likely to come soon.

Arbitration, too, has come up as a major hurdle in case of terminal expansion project at JawaharLal Nehru Port Trust (JNPT) and another project at Tuticorin Port Trust. In case of the fourth terminal project at JNPT, APM Terminals approached the court against its dismissal by the trust from participating in the bidding process.

With the Bombay high court rejecting its plea, the company challenged it in the Supreme Court.

Meanwhile, DP World, Mundra Port and Special Economic Zone-Adani Enterprises-Isolux Corsan Concesiones SA, PSA International-ABG Ports, GVK Developmental Projects-Samsung C&T Corp, and Sterlite Industries-Leighton Contractors, have submitted the financial bids for the JNPT project. However, the Trust can declare the results only after the Supreme Court delivers judgment on the case, which is expected soon.

The scenario, meanwhile, is likely to hurt the government’s plan to jack up capacity of major ports by 390 mt by 2012 from the current mark of around 600 mt. This translates into delay in tendering of 48 expansion projects worth `30,000 crore at major ports, which the government planned to deliver by 2012. Expansion at these projects entails channel deepening, berth mechanisation, and overall expansion of the port.