JN port board clears PSA-ABG bid for container terminal

JN port board clears PSA-ABG bid for container terminal

Bangalore: The Jawaharlal Nehru port on Monday gave its final approval to build a new container terminal worth 6,700 crore, three months after a group led by PSA International Pte Ltd won a bid for the project in a public auction.

“We have approved the bid and issued the letter of award to PSA, which is the leader of the consortium," port chairman L. Radhakrishnan said after a meeting of the board of trustees.

PSA has a 74% stake in the consortium with ABG Ports Pvt. Ltd holding rest.

The new terminal, with a berth length of 2km, will be able to accommodate seven ships at a time, compared with 2-3 at other terminals in India.

PSA, the world’s second biggest container port operator, along with local partner ABG Ports, quoted the highest revenue share of 50.828% for the 6,700 crore, 4.8 million standard container capacity a year terminal when price bids were opened in the last week of June, at the end of a tendering process that lasted more than two years.

This is the highest revenue share quoted by a private operator to a state-owned port in the history of India’s container port privatization programme that began in 1997.

On a debt-equity ratio of 60:40, PSA’s 74% equity share in the project will work out to about 2,000 crore, making it the biggest single foreign direct investment in an Indian port project. PSA International is fully owned by Temasek Holdings Pte Ltd, the sovereign wealth fund of Singapore.

The port, one of the 13 controlled by the Union government, handled 4.27 million standard containers in the year to 31 March from 4.09 million standard containers a year ago, clocking a growth of 4.9%.

The port cannot handle more containers unless it expands capacity. The port is expected to handle 11 million standard containers by 2016 and 23 million standard containers by 2020, according to a 10-year plan for ports unveiled by the shipping ministry in January.