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Business News/ Companies / News/ Adani Ports finally gets security nod to bid for port auctions

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Adani Ports finally gets security nod to bid for port auctions

3 min read 07 May 2013, 12:37 AM IST

P.Manoj

Security clearance to the firm will be valid for a period of 3 years, will enable APSEZ to bid for port tenders anywhere in India

A file photo of Chennai port. On Friday, the shipping ministry communicated to Chennai port its decision to grant security clearance to APSEZ to bid for one project in Kochi port and two in Kandla port. Photo: Hemant Mishra/Mint (Hemant Mishra/Mint) — A file photo of Chennai port. On Friday, the shipping ministry communicated to Chennai port its decision to grant security clearance to APSEZ to bid for one project in Kochi port and two in Kandla port. Photo: Hemant Mishra/Mint (Hemant Mishra/Mint)

Bangalore: Adani Ports and Special Economic Zone Ltd (APSEZ), India’s biggest private port operator, has been granted security clearance by the government to participate in auctions for port projects after a gap of more than two years.

The security clearance granted to the firm will be valid for a period of three years, according to a new government policy. This will automatically enable APSEZ to bid for port tenders anywhere in India.

On Friday, the shipping ministry communicated to Chennai port its decision to grant security clearance to APSEZ to bid for one project in Kochi port and two in Kandla port. Mint has reviewed this communication, which also directed Chennai port to “take appropriate action" on a ₹ 3,686 crore new terminal that is designed to load 4.8 million standard containers a year, implying that APSEZ was free to bid for the project.

The bidding process for the terminal has been stalled since December pending security clearance for APSEZ. When its price bid for the project was not opened by Chennai port on 24 December 2012, for lack of security clearance, APSEZ had filed a representation with Chennai port seeking a review of the government’s decision to deny clearance.

In its representation, the firm had argued that it was granted security clearance for the same project almost two years ago. An approval once granted will be valid for three years in accordance with the guidelines approved by the union cabinet on processing security clearance for port bidders, APSEZ had contended in its representation.

Chennai port had forwarded the representation to the shipping ministry, which in turn referred it to the union home ministry.

In early April, the home ministry gave its inputs on security clearance regarding APSEZ and asked the shipping ministry to take a final decision on the matter.

A spokesman for the shipping ministry said it had communicated to Chennai port the decision to grant security clearance to APSEZ and the clearance would remain valid for three years. A spokesman for Chennai port confirmed receiving the communication.

“We will take a proposal to our board of trustees shortly, stating that APSEZ has been given security clearance by the government and hence qualified to open its price bid," the spokesman said, adding that the decision will help the port take the container terminal project forward.

According to the practice followed so far, price bids for port contracts are opened only after pre-qualified bidders are granted security clearance by union government ministries such as home affairs, defence, external affairs apart from the Intelligence Bureau and the cabinet secretariat. Such clearances are sought on a project-to-project basis.

The security clearance procedure was revamped by the union cabinet in December 2012.

“Once security clearance is accorded by the shipping ministry to any company based on inputs from the relevant ministries/departments/organizations for any port project, such clearance in respect of the company would be valid for three years," according to the new guidelines approved by the cabinet on 6 December 2012, for processing security clearance of bidders for port projects, including dredging projects.

“Henceforth, security clearance for port bidders will not be project specific," said N. Muruganandam , joint secretary looking after ports in the shipping ministry.

“According to the security clearance procedures approved by the union cabinet, once clearance is granted to a firm for a particular port project, it will remain valid for three years during which the firm will be automatically security cleared to bid for projects in other ports as well," Muruganandam said.

A spokesman for APSEZ said that it was yet to receive any communication on the issue.

The Essar Group , the only other bidder to submit a price bid had quoted a revenue share of 5.25% for the project when the bid was opened on 24 December. Ports tenders are decided on the basis of revenue share. The entity willing to share the most from its annual revenues wins the deal.

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Published: 06 May 2013, 08:18 PM IST

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