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Business News/ Companies / News/  Kolkata Port Trust’s search for HBT replacement falls flat
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Kolkata Port Trust’s search for HBT replacement falls flat

Bids opened on Friday and it was found the port couldn’t afford the two firms that were interested

A file photo of Haldia port in West Bengal. After HBT walked out of Haldia port alleging unsafe working conditions and manhandling of senior officers by miscreants, the port authorities had launched a search for a new operator. Photo: India Today (India Today)Premium
A file photo of Haldia port in West Bengal. After HBT walked out of Haldia port alleging unsafe working conditions and manhandling of senior officers by miscreants, the port authorities had launched a search for a new operator. Photo: India Today
(India Today)

Kolkata: Four months after an operator quit Haldia port in West Bengal, the Kolkata Port Trust’s search for a replacement has drawn a blank, fuelling speculation that the authorities could now hold out an olive branch for Haldia Bulk Terminals Pvt. Ltd (HBT) to return.

After HBT, an India-French joint venture, walked out of Haldia port alleging unsafe working conditions and manhandling of senior officers by miscreants, the port authorities had launched a search for a new operator.

Bids were opened on Friday, and it was found that the port couldn’t afford the two firms that are interested, said an official, asking not to be named.

The lower of the two bids was of TM International Logistics Ltd (TMILL), an arm of Tata Steel Ltd. It has asked for a handling charge of 247 per tonne, whereas the maximum that the Haldia port can charge for cargo clearance in accordance with the guidelines of the tariff authority is 227.

If TMILL is selected as HBT’s replacement, Kolkata Port Trust, which controls Haldia port, will have to bear a loss of 20 per tonne.

The other bidder, J.M. Baxi and Co., asked for 259 per tonne, according to the port official cited above.

The situation was the opposite when HBT handled cargo at Haldia port—it used to charge 75 per tonne, but in the end, it said that business was unviable because cargo volumes were too low for it to offer such low handling charges.

HBT laid off 275 workers to stay afloat. It triggered a huge unrest and eventually forced the company to suspend operations at the port, breaking long-term contracts.

Kolkata Port Trust may be forced to reject these bids, said R.P.S. Kahlon, chairman. “We cannot accept bids that would result in losses," he said.

TMILL had participated in the bidding in 2008 as well when HBT emerged the lowest bidder, said Dibyendu Bose, managing director. Its bid this time was based on “realistic expectations" and takes into account the increased cost of labour, which has risen by about 10% a year, he said.

HBT had said in a statement last August that it had installed equipment to handle up to 18 million tonnes of cargo a year, but got only five million tonnes on average, which was a little over a third of the cargo shipment through the port.

Gurpreet Malhi, HBT’s chief executive officer, wasn’t immediately available for comments. He didn’t answer calls made to his mobile phone or return them.

Until a new operator is found for the berths vacated by HBT, cargo movement can resume with the help of other handling agents “in direct agreement" with end users—exporters and importers, Kahlon said.

But in the absence of mechanized handling facilities, cargo movement will be “slow and limited", according to Kahlon, who admitted that Haldia port’s business had slowed.

He declined to comment on the speculation that Kolkata Port Trust was negotiating through back channels to bring back HBT, citing the pending legal dispute between them over premature termination of contract.

Cargo handled by Haldia port has declined “considerably" from 17 million tonnes last year, said Lakshman Seth, a Communist Party of India (Marxist) leader from Haldia. The delay in awarding contract to a new operator will give “undue benefits" to others, according to him. “The best solution at this point is to bring back HBT."

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Published: 03 Mar 2013, 10:26 PM IST
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