Ennore terminal project heads for courts over shortlisting

Ennore terminal project heads for courts over shortlisting
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First Published: Thu, Jul 03 2008. 12 00 AM IST
Updated: Thu, Jul 03 2008. 12 00 AM IST
Bangalore: A plan by the Indian government to set up a Rs1,300 crore new container handling terminal at Ennore Port near Chennai is likely to be delayed with DP World and PSA International, two of the world’s top container terminal operators, set to approach the courts after being excluded from the bidding process because of a new rule limiting the number of short-listed bidders.
In keeping with a rule put in place earlier this year, the government has decided to restrict the number of shortlisted bidders for infrastructure projects, including cargo handling terminals at major ports, to six. This has been done to ensure the participation of only serious bidders.
“But this shortlisting policy will force serious bidders to challenge the bidding process,” said an executive who did not wish to be identified at DP World, the world’s fourth biggest container port operator owned by the Dubai government.
“We will certainly challenge the process in court and would like to know the reasons for our exclusion and on what basis the shortlisting has been done,” this executive added. DP World has bid for the 1.5- million twenty-foot equivalent units, or TEU, annual capacity project in association with IDFC Projects Ltd. A TEU is the standard measure in the container business.
Singapore government-owned PSA, which has bid for the project along with ABG Infralogistics Ltd, is also likely to seek redressal from courts, said an executive at the world’s second biggest container port operator. “We are looking to challenge the decision of Ennore port to exclude us from the bidding process,” added this PSA executive, who too did not wish to be identified.
Both DP World and PSA are dominant players in the container handling business at Indian ports. DP World runs terminals at Mumbai’s Jawaharlal Nehru port, Mundra, Chennai, Cochin and Visakhapatnam. PSA operates container terminals at Tuticorin, Kolkata and Kandla. It is also building a new facility at Chennai.
The exclusion of DP World and PSA has taken the industry by surprise. “How can DP World and PSA be considered non-serious bidders for a container terminal project? Then, who will be considered serious bidders?” asked an executive at ABG Infralogistics. He did not wish to be identified. This executive added that the new shortlisting policy has achieved just the opposite of what it intended to do by excluding “serious bidders from the bidding process.”
Local firm Sical Logistics Ltd, which was interested in the project has also has expressed displeasure over the selection of six to participate in the next round of the bidding process. “The shortlist is unbelievable and needs to be re-eaxmined,” said Sudhir Rangnekar, managing director and group CEO, Sical Logistics, who had submitted an initial qualification bid along with Australia’s Macquarie Group Ltd.
“If two of the world’s top four container terminal operators don’t get selected, then there is something not normal with the process. There is no reason why these leading container terminal operators should not be in the reckoning,” he added.
Many other bidders including Sical have decided to seek clarification from Ennore Port authorities on how experience scores have been awarded to each of the 22 consortia that had submitted initial bids, to arrive at the shortlist of six.
But Ennore Port says that there was nothing wrong in the evaluation process. “The evaluation and shortlisting of bidders was done on the criteria mentioned in the bidding documents. We can’t do anything about it,” said an official at Ennore port looking after the bidding process who asked not to be identified. The evaluation was carried out by SBI Capital Markets Ltd.
The six shortlisted includes APM Terminals; Gammon Infrastructure Projects Ltd-Dragados SPL-Leighton Holdings Ltd; NYK Line with Hyundai Merchant Marine Co. Ltd; Vedanta Resources Plc. with Eurogate GmbH and Co.; Larsen and Toubro Ltd with John Keells Holdings Plc.; Grup Maritim TCB, S.L.-Obrascon Huarte Lain, S.A.-G E Mauritius International Holdings and Eredene Capital Plc.
Those excluded include big names such as Mundra Port and SEZ Ltd with Neptune Orient Lines Ltd; GVK Power and Infrastructure Ltd with Mitsui and Co. Ltd; IL&FS Ltd with Punj Lloyd Ltd and Pembinaan Redzai Sdn Bhd; Lanco Infratech Ltd with JSW Infrastructure and Logistics Ltd; International Container Terminal Services Inc; Vadinar Oil Terminal Ltd with Essar Shipping, Ports and Logistics Ltd and Wan Hai Lines Ltd; Terminal Investment Ltd with Samsung Heavy Industries Co. Ltd, Shipping Corp. of India Ltd, Concor Ltd, CWC Ltd and Hind Terminals Pvt. Ltd; Saqr Port Authority with RAK; IMC Ltd with ITD Cementation India Ltd and Srei Infrastructure Finance Ltd; GS Engineering and Construction Co. Ltd with India Bulls Financial Services Ltd.
At an annual growth rate of about 18-19%, India’s container traffic is estimated to rise to 21 million TEUs by 2016 from about 7.5 million TEUs now.
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First Published: Thu, Jul 03 2008. 12 00 AM IST