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ABG set to win new container handling deal

Firm emerges the lowest bidder, at a rate of Rs 1,465 per container move, to load containers
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First Published: Fri, Nov 23 2012. 09 27 PM IST
A file photo of containers at Kolkata port. The winner of the bid will have to invest funds to erect cranes at the facility, which will have the capacity to handle 125,000 standard containers a year. Photo: Indranil Bhoumik/Mint
A file photo of containers at Kolkata port. The winner of the bid will have to invest funds to erect cranes at the facility, which will have the capacity to handle 125,000 standard containers a year. Photo: Indranil Bhoumik/Mint
Bangalore: Barely days after it walked out of a contract for loading bulk cargo at Kolkata port’s Haldia dock complex citing worsening law and order, ABG Ports Ltd is set to win a 10-year deal for handling containers at the port.
ABG Ports, a unit of Mumbai-listed ABG Infralogistics Ltd, quoted a rate of Rs.1,465 per container move to emerge the lowest bidder for the contract to load containers at berth 5 when the price bids were opened on Friday.
Kolkata-based P.P. Roy Chowdhury and Co. Pvt. Ltd, the only other entity to place a price bid, quoted a rate of Rs.2,150 per container move.
Spokespersons of ABG and Kolkata port confirmed the outcome of the bidding.
The new facility will have a capacity to load 125,000 standard containers a year. The winning bidder will have to invest funds for erecting cranes for handling containers at the berth.
The Union government-controlled Kolkata port had threatened to blacklist ABG from participating in all future auctions at the port after the Haldia incident on 31 October.
“The same port has short-listed and opened the price bid of ABG,” a Mumbai-based port expert said, asking not to be named because of the sensitive nature of the issue.
ABG Kolkata Container Terminal Pvt. Ltd, a joint venture between ABG and Singapore’s PSA International Pte. Ltd, already handles containers from two berths at Kolkata port that load a combined 250,000 standard containers a year. ABG owns a 51% stake in the terminal with PSA, the world’s biggest container port operator, holding the balance.
The 10-year contract for the existing two berths will end in November 2014, but the port authority has the option to extend the contract for another five years. ABG Kolkata Container Terminal is charging Rs.895 per container move from customers at the existing berths.
In August, ABG erected a new crane at one of the existing berths. “The new crane has improved productivity levels to a great extent and has come as a relief for the customers of the port who are faced with so many challenges,” said Prema Krishnan, a general manager at Bengal Tiger Line (India) Pvt. Ltd, which runs shipping services from ABG Kolkata Container Terminal.
On 5 November, a few days after the Haldia episode, the Union government-controlled Kandla port in Gujarat terminated its pact with ABG Kandla Container Terminal Ltd after the firm failed to fulfil a key contractual obligation on achieving minimum guaranteed volumes at the terminal for the last three years.
However, on 9 November, ABG said in a statement it had walked out of the Kandla port project citing a default on the part of the port to fulfil its contractual obligations under an agreement signed in June 2006 for the 30-year deal. ABG claimed Kandla port did not give the depth of 12.5 metres it was contractually mandated to provide at the terminal. The port has disputed this claim.
ABG Kandla Container Terminal is also a joint venture between ABG and PSA, with shareholding similar to that at Kolkata Container Terminal.
ABG has been bidding aggressively for cargo-handling pacts at Union government-controlled ports, either by quoting the lowest cargo handling rate or by offering the highest revenue share to the government-owned ports.
In September, ABG Container Handling Pvt. Ltd, a separate unit of ABG Infralogistics, won the rights to develop and operate a new container loading facility, the second, at V.O. Chidambaranar port (formerly known as Tuticorin port) in Tamil Nadu.
ABG quoted a revenue share of 55.19% to win the 30-year pact.
This is the highest revenue share quoted by a private operator in the history of India’s container port privatization that began in 1997. The bidder willing to share the most from its annual revenue with the government-owned port gets the contract, according to the port privatization policy of the Union government.
ABG will invest Rs.312.23 crore to develop the facility at V.O. Chidambaranar port, which can load 600,000 standard containers a year.
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First Published: Fri, Nov 23 2012. 09 27 PM IST
More Topics: ABG | Port | Container | Kolkata Port | Haldia Dock |
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