Bangalore: Union government-owned V.O. Chidambaranar port in Tuticorin may ask Transstroy (India) Ltd to raise its price bids for building two coal loading facilities after it emerged the highest bidder for the projects late December.

The Hyderabad-based engineering and construction firm offered a revenue share of 24% for developing a 420 crore, 7.28 million tonne (mt) capacity a year berth for handling thermal coal and rock phosphate, two people familiar with the auction process said.

For another berth at the port, Transstroy quoted a revenue share price bid of 28%, a port official, one of the two persons mentioned above, said on condition of anonymity because he is not authorized to speak to the media.

This berth, estimated to cost 355 crore to build, is to load 7.28 mt of thermal coal and copper concentrates a year.

Sterlite Industries Ltd, the only other bidder, quoted a revenue share of 10% and 15%, respectively, for the projects, the official said.

S. Natarajan, chairman in-charge of V.O. Chidambaranar port, said Transstroy (India), which has a technical tie-up with Russia’s Corporation Transstroy OJSC, was the highest bidder for the projects.

“Definitely the port will be interested (in getting a higher revenue share from Transstroy) and will be doing it (asking Transstroy to examine the possibility of raising its bids)," Natarajan said, adding that the port’s board of trustees will meet shortly to decide on the bids placed by Transstroy.

A spokesman for Transstroy said the company was awaiting the port’s decision on its bids.

Cargo handling contracts at India’s dozen Central government-owned ports are decided on the basis of revenue share—the bidder willing to share the most from its annual revenue with the port gets the contract, according to the port privatization policy.

If Transstroy wins the two coal berths, it will be the third such cargo-handling contract for the firm at V.O. Chidambaranar port in the past two months.

Transstroy won a 30-year contract in December to build a 86.17-crore berth that can handle 2.3 mt of cement a year, marking its entry into port development.

It was the only entity to place a price bid for this project and the port awarded the contract after the firm raised its revenue share price bid to 22% from its initial quote of 4%, a spokesman for the port said.

V.O. Chidambaranar port is working on expanding its coal-handling capacity to 35.75 mt
by 2020 from 14.75 mt now with private funds, to cater to the coal-import needs of power plants coming up in Tamil Nadu, where power outages are common.

Coal is used to fire more than half of India’s current power generation capacity, according to the country’s electricity regulator.

V.O. Chidambaranar port has also benefited from a court-imposed ban on handling coal at Chennai port, also controlled by the Union government. Between April and November, Chidambaranar port loaded 4.4 mt of thermal coal, up from 3.9 mt in the same period the previous year.

ABG LDA Bulk Handling Pvt. Ltd is constructing another berth at the port with an investment of 332.16 crore to load 10 mt of thermal coal a year. This facility will start operations in March 2014. ABG quoted a revenue share price bid of 52.14% in 2011 to win the 30-year contract.

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