Bangalore/ Mumbai: The Union government’s plan to develop a Rs1,407 crore container terminal at Ennore Port near Chennai has hit a hurdle with the Madras high court directing the port management to reconsider its decision to exclude several groups from the bidding process.
The terminal will be able to handle 1.5 million standard containers a year when it opens in 2011.
The Madras high court, in a 21 January order by justice K. Venkataraman, directed Ennore Port Ltd to reconsider its decision after it admitted petitions by five groups that challenged their exclusion from the bidding. It dismissed three other petitions.
A copy of the order was received by the interested parties on 4 February.
PSA International Pte Ltd and ABG Infralogistics Ltd, the India Terminal consortium, and another group comprising Sical Infra Assets Ltd and Macquaries Capital Ltd had approached the court over their disqualification.
Sical Infra Assets is a subsidiary of Sical Logistics Ltd and Macquaries Capital is a unit of Australia’s biggest investment bank Macquarie Group Ltd.
The India Terminal consortium includes Terminal Investment Ltd, Samsung C and T Group, Container Corp. of India Ltd, Shipping Corp. of India Ltd, Central Warehousing Corp. Ltd and Hind Terminals Pvt. Ltd.
Meanwhile, Zim Ports Ltd, the port operating unit of struggling Israeli shipping firm Zim Integrated Shipping Services Ltd, has dropped out of a consortium that was qualified to bid for the project.
Zim Integrated is a subsidiary of Israel Corp.
Zim Ports was the fourth member of a shortlisted consortium led by Japan’s NYK Line Ltd that included Evergreen Marine Corp. (Taiwan) Ltd and South Korea’s Hyundai Merchant Marine Co. Ltd. Zim has informed the other partners about its decision to pull out. Zim Ports had a 22% stake in the consortium and its investment was estimated at $66 million (Rs321.42 crore).
Persons in the shipping industry say Zim was not keen on the project as the global economic slowdown and the plunge in shipping activities had taken a heavy toll on the company.
Zim has already scaled down its India operations by withdrawing container ships servicing the India-Europe sector. Several senior executives at the Mumbai office have either left the company or have been transferred to other locations worldwide.
“The shipping activities in India will continue as before with plans to grow at the right time. India is on high priority on Zim’s strategic plans for years to come, as it has been in the past 60 years. The port activities (investing in terminals) are unrelated to the shipping business and the two should not be connected,” Zim’s spokesman wrote in an email to Mint.
Ennore Port said Zim’s withdrawal would not materially affect the NYK-led consortium.
According to the government’s qualification criteria for port projects, credentials of eligible applicants are measured in terms of their experience score on the basis of ports and other core sector projects that they have implemented and operated. The aggregate experience score for a particular applicant is the sum of its scores for all eligible projects.
In the case of a consortium, the aggregate experience score of members with equity share of at least 26% in the group, is aggregated for arriving at the consortium’s combined experience score. The applicants are then ranked on the basis of their respective aggregate experience scores and shortlisted for submission of price bids.