Bangalore: Two Union government-owned ports located just a few kilometres away on India’s eastern coast are slugging it out to develop container handling facilities with private investment to cater to rising needs of exporters and importers in the world’s second fastest growing major economy.
Growing traffic: Containers being brought in at Jawaharlal Nehru Port Trust in Mumbai. Demand for container facilities is rising in the country and both the Chennai and Ennore ports are looking to tap it.
One of them, Ennore Port Ltd, was set up primarily to handle the so-called dirty cargo such as iron ore and coal and free Chennai Port, just 20km away, from handling such cargo that could pollute the city. But, with Ennore getting into the business of handling clean cargo such as containers, Chennai Port says it sees no reason to give up dirty cargo.
The fight between the two ports started when Ennore Port, the country’s first Union government-owned major port set up under the Companies Act 1956, floated a global tender on 8 March to set up a Rs1,300 crore container cargo facility with an annual capacity of 1.5 million twenty-foot equivalent units, or TEUs, at the port. A TEU is the standard size of a container and is a common measure of capacity in the container business.
Chennai Port retaliated and, on Wednesday, floated a global tender for building a mega Rs3,150 crore container terminal with an annual capacity of 4 million TEUs at the port, leaving bidders confused as to which one to bid for. “It will restrict competition among firms for the two projects. It would have been better if Chennai had come out with the tender after Ennore had completed the bidding process,” said a Gammon Infrastructure Projects Ltd official, who did not wish to be named. Firms have until 16 June to submit initial bids for the 30-year project at Chennai Port, which is expected to get operational by 2013.
In case of Ennore Port, firms have until 30 April to submit pre-qualification documents to be eligible for bidding.
“It is a good sign that ports are ambitious and are looking at large volumes of container traffic,” said S. Hajara, chairman and managing director of state-owned Shipping Corp. of India Ltd. India’s container traffic is estimated to rise to 21 million TEUs by 2016 from about 7.5 million TEUs now, according to the union shipping ministry.
Chennai and other 10 Union government-owned major ports are run as trusts under the Major Port Trusts Act, 1963. These ports are regulated by the Tariff Authority for Major Ports; Ennore being a corporate port is not.
PSA International Pte. Ltd, the world’s second biggest container port operator owned by the Singapore government’s investment arm Temasek Holdings Pvt. Ltd, will not be allowed to bid for the third terminal at the port, says the tender issued by Chennai Port.