Bangalore: Essar Shipping Ports and Logistics Ltd, a unit of the Ruias-promoted Essar Group, looks set to win a Rs107,0.36 crore contract to develop and operate a coal and iron ore terminal at Paradip Port on the east coast.
Port authorities plan to build a Rs479.01 crore, 10 million tonnes (mt) capacity a year terminal for handling coal, and another Rs591.35 crore, 10mt capacity a year terminal for handling iron ore.
Development plans: Paradip Port has received two price bids for the cargo handling projects, but one of them may be ruled out.
Chairman K. Raghuramaiah said the port received two price bids for the two cargo handling projects when the date for submitting the bids closed on Wednesday. Essar Shipping Ports and Logistics Ltd and a consortium comprising Sical Logistics Ltd and Orissa Stevedores Ltd submitted bids for the iron ore berth. Raghuramaiah said the Sical consortium submitted a price bid without the mandatory bank guarantee. According to bidding rules, this disqualifies the bidder.
Essar Shipping Ports and Logistics and the Adani group-promoted Mundra Port and Special Economic Zone Ltd submitted price bids for the coal terminal. In this case, Essar submitted the highest price bid, Raghuramaiah told Mint by phone from Paradip.
Though the port was evaluating the offers, including the one submitted by Sical for the iron ore terminal without a bank guarantee, Raghuramaiah said Essar has become the “highest bidder” for the two projects.
The bidder willing to share the highest percentage of its annual operating gross revenues with the government-owned port will win the rights to develop and operate the berths for 30 years. Raghuramaiah did not disclose the revenue share submitted by Essar.
This would be the first port project to be auctioned by the UPA government. The offers came two days after the Election Commission announced dates for the next general election.
The responsibility of approving the bids submitted by Essar will now have to be taken by the new government at the Centre, expected to be in place sometime in June.
The coal and iron ore terminals at Paradip would mark Essar’s entry into the business of developing and operating cargo handling terminals.
Essar Steel Ltd, another group company, is setting up an integrated 6mt per year steel plant close to the port. The two terminals will help the company import key raw materials such as iron ore and coal for the steel plant. Essar declined to comment.