Paradip wants fresh bidding for coal berth

Paradip wants fresh bidding for coal berth

Bangalore: The shipping ministry is examining a request from the Paradip port in Orissa to reauction a coal handling berth, after the second round of bidding attracted lower price quotations than the first.

“We are examining the recommendation. A final decision has not yet been taken," a shipping ministry official said, asking not to be named.

The bidder willing to share the highest percentage of annual operating gross revenue with the Union government-owned port wins the right to develop and operate the berth for 30 years.

In the first round of bidding, Essar Shipping Ports and Logistics Ltd had emerged the highest bidder for the coal berth, quoting a revenue share of 24%. The Adani Group-promoted Mundra Port and Special Economic Zone Ltd (MPSEZ) was the only other bidder, submitting a revenue share of 11.10%.

Essar was also the lone bidder for a Rs591 crore iron ore-handling terminal at the port. It had quoted a 25% revenue share.

But because the same entity cannot develop and run both the terminals as per tender rules, Paradip port asked MPSEZ to match Essar’s bid for the coal berth.

“We matched the highest price quoted by Essar for the coal terminal in the first round," said an executive at MPSEZ, who did not want to be named.

Still, Paradip port had to call for fresh price bids for both the terminals from the shortlisted, security-cleared bidders, following a ruling from the Orissa high court.

A consortium led by Hong Kong-based commodity trader Noble Group Ltd had filed a writ petition in the court stating that it was not given enough time to submit price quotations.

In the second round of bidding that concluded on 15 April, the Noble-led consortium became the highest bidder for the iron ore terminal, quoting a revenue share of 36%, according to some of the bidders. Essar came second with a quote of 30%.

For the coal berth, MPSEZ emerged the highest bidder quoting a revenue share of 12%. Essar ended second with an 11% quote.

Port chairman K. Raghuramaiah said the board has now recommended a reauction only for the coal terminal because the price quotation was lower than in the first round.