Bangalore: Essar Shipping, Ports and Logistics Ltd, a unit of the Ruias-promoted Essar Group, is set to win the rights to develop and operate a coal-handling berth for 30 years at the State-owned Paradip port on India’s eastern coast.
Essar Shipping has emerged the highest bidder for developing and operating the Rs479 crore terminal, which has a capacity to handle 10 million tonnes (mt) of coal a year.
“Essar Shipping...has submitted a price bid of 22% for the coal berth,” said Rakesh Srivastava, joint secretary looking after ports in the shipping ministry. “We are in the process of finalizing it.” In effect, the firm is willing to share 22% of the annual operating gross revenue from the terminal with Paradip port through the 30 years.
An executive at Essar confirmed the development, but declined to give details. He did not want to be named. A spokesman for Essar declined to comment.
Paradip port chairman K. Raghuramaiah said a final decision on the bid will be taken subject to clearance from the Supreme Court in accordance with a recent ruling.
Mundra Port and SEZ Ltd (MPSEZ), which runs India’s biggest private port at Mundra in Gujarat, was the only other firm to submit a price bid for the coal berth. It quoted a 20% revenue share.
This is Paradip port’s third attempt in four months to auction the terminal. In the first round, Essar Shipping had emerged the highest bidder for the coal berth by quoting a revenue share of 24%. However, Paradip port decided to invite fresh price bids from the shortlisted, security-cleared bidders following a ruling from the Orissa high court.
One of the bidders had gone to court, stating that it was not given enough time to submit its price quotation as it had received the security clearance from the government just two days before the bid submission date for the berth closed.
In the second round, MPSEZ was the highest bidder, quoting a revenue share of 12% against Essar’s 11%. This round too also scrapped because the highest quotation was lower than the one submitted by Essar in the first round.