Bangalore: A consortium led by Hong Kong-based commodity trader Noble Group Ltd looks set to win the rights to develop and operate an iron ore handling berth at Paradip port in Orissa.
The Adani Group-promoted Mundra Port and Special Economic Zone Ltd (MPSEZ) is close to winning a coal handling berth at the port on India’s eastern coast.
Awaiting decision: Paradip port plans to build a Rs479 crore terminal to handle coal shipment and a Rs591 crore terminal for iron ore.
The Noble consortium and MPSEZ emerged the highest bidders for the respective berths when the price quotations submitted by shortlisted bidders were opened on 15 April, a port official said on condition of anonymity because the results have not been made public yet. An official spokesman declined comment. Paradip port plans to build a Rs479 crore terminal with a capacity to handle 10 million tonnes (mt) of coal a year and a Rs591 crore terminal capable of handling 10mt of iron ore a year.
The bidder willing to share the highest percentage of its annual operating gross revenues with the Union government-owned port will win the rights to develop and operate the berths for 30 years.
The Noble consortium includes Mumbai-listed Gammon Infrastructure Projects Ltd and state-owned commodity trader MMTC Ltd.
“We have become the highest bidder for the iron-ore terminal,” said Kshitiz Bhasker, head, business development at Gammon Infrastructure Projects. The Noble consortium has agreed to share 36.80% of its annual operating gross revenues with the port.
Essar Shipping Ports and Logistics Ltd and a consortium comprising Sical Logistics Ltd and Orissa Stevedores Ltd had also submitted price bids for the iron ore berth.
An executive at the Adani Group said that MPSEZ, which runs India’s largest private port and a special economic zone at Mundra in Gujarat, had submitted the highest price quotation of 12% for the coal terminal. In the process, MPSEZ beat other contenders for the coal berth that include Essar and the Noble consortium.
The winners will be awarded the contracts after a new government is formed in New Delhi, said a shipping ministry official, who declined being named. India is holding a five-phase general election that began on Thursday. Poll results will be declared on 16 May.
In August, the tariff regulator for India’s government-owned ports such as Paradip approved handling charges for the two terminals. The Tariff Authority for Major Ports has set a handling charge of Rs157 per tonne for the iron ore terminal. For the coal terminal, the handling charge has been set at Rs130 per tonne for thermal coal. For other types of coal, the charge will be Rs130 per tonne for foreign coal cargo and Rs78 per tonne for coal used locally.
These rates will be indexed to the Wholesale Price Index, a measure of inflation, to the extent of 60% every year, to account for rising prices.