A divisional bench of the Kerala High Court has issued a stay on the development of the Rs 5,000 crore Vizhinjam International Container transhipment port in Kerala
HC stays work till Zoom Developers’ quotation is evaluated
MUMBAI: A divisional bench of the Kerala High Court has issued a stay on the development of the Rs 5,000 crore Vizhinjam International Container transhipment port in Kerala, which was awarded to Hyderabad-based Lanco Infratech.
The ruling comes in response to a petition filed by Mumbai-based Zoom Developers, whose bid for the port project was disqualified on technical grounds.
The divisional bench, headed by chief justice H L Dattu, has given 15 days to the evaluation committee to look into the tender quotations submitted by Zoom. Till such time no work will be undertaken at the port.
The order also mentions that if the bid submitted by the consortium Zoom Developers-Portia Management Services is technically qualified and financially superior, Lanco’s bid would be cancelled.
Minu Patriwala, vice president-infrastructure, Zoom Developers, said the company is confident of being awarded the project as their bid is financially and technically far better than Lanco’s.
“Our net present value of the bid is over Rs 110 crore, as against Rs 33 crore offered by Lanco,” he said.
The Lanco-led consortium was awarded the project in May 2008. Lanco had tied-up with Pembinan Radzai Sdn Bhd (PRSB) of Malaysia to execute the work.
Sanjay Diwakar Joshi, director-infrastructure, Lanco Infratech, said the company will assess the court order and then decide the course of action.
“As the matter was sub judice, the concession agreement for the port was not signed and Lanco had not begun any work,” Joshi said.
The firm was to achieve the financial closure over the next two years before starting work.
Zoom had filed a petition challenging the award of the contract to Lanco. “The Kerala government was very secretive in awarding the contract to Lanco and disqualifying us, when the same technical bid was approved earlier,” said Zoom’s Patriwala.
This was the second attempt to build the Vizhinjam port, when Kerala had floated the bid in August 2007 through Vizhinjam International Seaport Ltd, on a 25-year concession basis.
During the first bid in 2004-06, a consortium of Zoom and two Chinese developers was selected. However, the contract was not awarded at the last moment citing security reasons.
While addressing the media in Thiruvananthapuram, state port minister M Vijayakumar said, the court verdict will delay the project. “The government will follow the court’s directions because everything has been done promptly,” Vijayakumar said.
The state was looking at legal options to remove hurdles in the way of the port, he said.
The Vizhinjam port boasts of a natural 15 metre draft, which can accommodate very large ships and is planned as a transhipment hub in the west coast of India.
Currently, the traffic coming to India from western countries gets transhipped at Colombo port in Sri Lanka and at Salalah Port in Oman.
Although the court ruling might get Lanco out of the project, analysts feel it will not impact the stock adversely.
An analyst from a Mumbai-based brokerage, who did not wish to be named since he is not authorised to speak, said that they had not included the project in their valuations targets from Lanco, as it was a long-drawn one.
“However, if the contract goes to Zoom, it will be a loss for Lanco and the stock might see a marginal impact in a weak market,” he said.
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