Bangalore: The Mumbai port has awarded a key channel deepening contract to dredging firm Jaisu Shipping Co. Pvt. Ltd, a move that takes the port closer towards developing a new terminal that can handle 1.2 million standard containers a year.
While the board of state-owned Mumbai port and the shipping ministry had cleared Jaisu’s bid last year, the Election Commission only last week cleared the grant of the contract, saying it did not violate the model code of conduct, which has come into force since national elections were declared earlier this year.
“The Rs380-crore, two-year contract was given to Jaisu Shipping on 1 April,” a shipping ministry official said on condition of anonymity because it hasn’t been made public yet.
Raising tempo: A file photo of the Mumbai port Trust. In the year ended 31 March, Mumbai port handled a mere 100,000 standard containers at its terminal now run by the Gammon-Dragados venture. Ashesh Shah / Mint
The Rs1,200 crore container terminal is being developed by a joint venture between Mumbai-listed Gammon Infrastructure Projects Ltd and Spanish logistics firm Dragados SPL on a 30-year contract. The Gammon-Dragados team will operate and manage the existing container terminal at Mumbai port till the new terminal is built and is ready for operations.
However, as part of the deal, Mumbai port must fulfil certain obligations. “The channel deepening work is one of them,” the ministry official quoted earlier said.
The dredging is funded by the government. Jaisu Shipping, owned by the Kewalramani family and based out of Kandla, Gujarat, will have to deepen the water channel that will lead to the terminal from its existing 4m to 16.5m. This will enable large container ships to access the terminal. Jaisu is also deepening channels at state-owned Cochin and Kandla ports on India’s western coast.
Lack of adequate channel depth and poor infrastructure drove container shipping lines in the 1990s to the nearby Jawaharlal Nehru Port, just seven nautical miles ahead on the same channel. Mumbai port authorities are counting on the new terminal with a deep draft (depth) of 16.5m to restore its stature as a major port.
The container business of Mumbai port was also hit by the arrival of P&O Ports (now acquired by the Dubai government owned DP World Ltd) at Jawaharlal Nehru Port in 1998 to operate India’s first private container terminal, following the opening up of the ports sector to private investments. Until then, Mumbai port had been handling about 700,000 standard containers a year.
In the year ended 31 March, Mumbai port handled a mere 100,000 standard containers at its terminal now run by the Gammon-Dragados venture. In comparison, Jawaharlal Nehru Port, now India’s busiest container port, handled 3.95 million standard containers in the same period.