Mormugao Port Authority issued a letter of award to Delta Infralogistics (Worldwide) last week after it quoted a royalty of Rs126.55 a metric ton (mt) in a tender. Delta Infralogistics (Worldwide) was the only bidder to place a price quotation for operating and maintaining Berths 10 and 11 at Mormugao Port.
The bid result is expected to bolster other stevedoring companies to participate in India’s port privatisation programme if the tender terms are suitable.
The project is a part of the National Monetisation Pipeline (NMP) wherein operational infrastructure assets including port terminals will be privatised through the public-private-partnership (PPP) route.
Berth 10 currently handles general cargo and Petroleum Oil and Lubricants (POL) while Berth 11 handles general cargo with a combined capacity of 6.4 mt.
Delta Infralogistics (Worldwide) will have to invest some Rs130 crore on equipment to handle cargo. The operator is also contractually bound to replace the cargo handling cranes after 15 years entailing fresh investments.
To attract a wider participation of bidders for privatising Berths 10 and 11, Mormugao Port Authority tweaked the qualification rules that allowed Delta Infralogistics (Worldwide), a stevedoring company, to apply on the tender.
There is no standard bidding document for operation and maintenance contracts at state-owned major ports unlike the Design, Build, Finance, Operate and Transfer (DBFOT) model. Stevedores say they are keen to participate in the privatisation tenders issued by major port authorities to remain in business, but the qualification criteria stood in the way as it sets steep financial parameters on net worth, turnover, etc.
Under the Major Port Authorities Act, 2021, the publicly governed port authority acts as a regulatory body and as landlord while private firms carry out port operations, mainly cargo handling activities. The landlord port, in return, gets a share of the revenue from the private entities.
As all the cargo berths self-run by the port authorities are expected to be privatised, cargo previously handled by stevedores will be handled by PPP operators authorised to handle multi cargoes, drawing sharp criticism from stevedores.
“We made the qualification criteria for privatising Berths 10 and 11 to accommodate stevedores and enhance competition,” the government official added.
