State-run Mormugao Port Authority has sought direction from the government to decide on a tender to privatise an unused cargo berth at the Western coast port after receiving two bids including from Adani Ports and Special Economic Zone Ltd (APSEZ), a development that could result in a single bidder scenario with attendant impact on price quotations.
This is because Mormugao Port Authority is expected to follow other State-owned major ports such as Jawaharlal Nehru Port Authority, Deendayal Port Authority, Visakhapatnam Port Authority and Paradip Port Authority, all of whom have disqualified APSEZ from recent tenders.
APSEZ has been disqualified by these port authorities due to a tender condition that forbids firms involved in contract termination at other ports from participating. A coal handling terminal run by a unit of APSEZ at Visakhapatnam Port Authority was terminated in December 2020, a few years into its 30-year contract.
When APSEZ is disqualified from the tender at Mormugao port, only JSW Infrastructure Ltd will be left in the fray.
“Everybody, including the sole bidder, will know this. Due to that, what is going to happen is we may not get a good price bid as there will be no competition,” a port official said.
“To circumvent this peculiar situation, Mormugao Port Authority has proposed to the government that the tender should be scrapped and to invite fresh bids on a single stage format,” the official said.
“We have suggested to the government that for all future tenders, we should be permitted to go for single stage bidding instead of the two-stage process that is currently being followed in all major ports,” the official said.
Under the two-stage bidding, there will be a pre-qualification round and only those who qualify on technical parameters are allowed to submit their price quotations.
A single stage bidding will club both the technical and financial bids, where the technical and financial bid will be submitted by the prospective bidders in one go which will be screened by the port authority step by step.
“That’s an idea worth looking at and a better thing to do in the prevailing circumstances,” he said.
The port authority reckons that the two-stage bidding process will hurt the competitiveness of the bid in a situation where APSEZ is one of the bidders and is disqualified, leaving a single bidder for the tender.
“That’s the crux of the matter,” the official said.
The current tender has not been terminated as the project is a part of the National Monetisation Pipeline (NMP) and is being monitored at the highest level in the government.
“We cannot do that, it must go to the Ministry of Ports, Shipping and Waterways. We just cannot kick it out of the scene. So, we have asked the Ministry’s permission to discharge the tender and to go for fresh tender on single stage format. The Ministry has to take a call on that,” he said.
APSEZ has approached the Supreme Court challenging its disqualification from tenders at major ports and the case is yet to be decided.
“The other thought process is that by the time the Ministry responds to our proposal, the apex court may decide on APSEZ’s petition. That also is there at the back of the mind, but we don’t know when the court order will finally come and whether it will be in APSEZ’s favour or not. If it comes in their favour, then we are in a win-win situation and can go ahead with the same tender,” the official said, explaining the port authority’s quandary over the matter.
The port authority has sought bids from private firms to redevelop Berth No 9 and three barge berths having a capacity to handle 12 million tonnes (mt) of cargo with an investment of Rs 842 crore.
The successful bidder will be allowed to handle iron ore and other cargo excluding containers, coal, and break bulk.
The Berth No 9 has not been operational since 2012 when the port authority dismantled the mechanised iron ore handling facilities such as stacker cum reclaimer and hopper loaders, after the Supreme court banned the export of the steel making commodity from Goa. The berth is occasionally used for handling granite and bauxite cargo while the three barge berths are used to park ships including those run by the Indian Coast Guard.
