Jawaharlal Nehru Port Authority (JNPA) has created qualifying requirements for organizations wishing to bid for dredging, offshore reclamation, and shore protection projects estimated to cost Rs 20,647 crore for the proposed Vadhvan Port.
Bidders must have a minimum technical capability of Rs 15,113.60 crore, which includes 10 years of experience building suitable projects in two categories. According to reports, the two categories are construction experience in port and core sectors and public-private partnership (PPP) experience in port and core sectors.
Ports, port terminals/berths, jetties, and similar infrastructure; capital and maintenance dredging projects; offshore reclamation projects; breakwaters; material inland waterway terminals; approach trestles; marine bridges; and any other offshore structures associated with ports are all included in the port sector.
The core sector includes the cost of building highways, power plants, commercial establishments (SEZs, etc.), telecom, airports, railroads, metro rail, industrial parks, stadiums, hospitals, hotels, smart cities, pipelines, irrigation, water supply, warehouses, silos, oil and gas, sewers, and real estate developments. Projects with the designations RIDF, PMGSY road, link road, city road, rural road sector/municipality road, and real estate projects that showcase road development or bridge or culvert construction will also be included.
Eligible projects with PPP experience in the port sector and/or construction experience in core sector categories should account for at least one-fourth of the threshold technical capability. Projects that are eligible for consideration include payments or revenues that, in the case of construction experience, exceed 5% of the Phase-I projected project cost. When it comes to PPP experience, the project’s capital cost should exceed 5% of the Phase-I project cost estimate.
According to sources, a bidder must have a minimum net worth (financial capacity) of Rs 2,267.04 crore at the end of the previous fiscal year, which is 15% of the technical threshold capacity for which bids are being called. In the case of a consortium, eligibility would be determined by the combined technical expertise and financial resources of the members who already hold and will hold an equity stake of at least 26% in the special purpose vehicle (SPV).
This is subject to the requirement that each of these members hold equity share capital equal to at least 26% of the SPV’s subscribed and paid-up equity and 5% of the total project cost as specified in the concession agreement for a period of six months following the date the project begins commercial operation.
Additionally, each consortium member must have a minimum net worth equivalent to 7.5% of the Phase 1 project cost from the previous fiscal year. Only those who contribute a minimum of 26% of the consortium’s shares will have their financial strength or experience score evaluated by the technical and financial capacity calculation technique in the case of a joint venture or consortium.
According to credit rating agencies approved by the Securities and Exchange Board of India (SEBI), a bidder must have an A- (A minus) and higher credit rating. A comfort letter from the bidder’s bankers or other financial institutions stating that they will offer the bidder credit facilities (a term loan) to cover the project costs, excluding any grants, must be submitted with the bid if the bidder’s credit rating is not A- or higher. The weighting of OECD countries has been set at 50%.
The remaining 400 hectares of reclamation work will be completed in two years during the second phase, at which time the contractor will get 60% of the contract value. According to reports, the contractor will receive the remaining 40% of the contract value for both phases during the course of a ten-year maintenance period that will begin once the two phases of shore protection, dredging, and offshore reclamation are finished in five years. The maintenance period will not include maintenance dredging.
Before developers are asked to make bids, the plan has been sent to the Ministry of Ports, Shipping, and Waterways for approval before being sent to the Public Private Partnership Appraisal Committee. For the first time, the PPP HAM model is being tested for shore protection, offshore reclamation, and dredging projects in an Indian port. Usually, these projects are completed using the conventional engineering, procurement, and construction (EPC) method, in which the contractor is paid in installments throughout the duration of the contract, settles the final bill after the work is finished, and then leaves.
