The Hindu Business Line : Govt cancels Hyundai's bid for Sethusamudram project

The Rs 2,427-crore project to create a 167-km canal connecting Palk Strait and the Gulf of Mannar involves dredging 82.5 million cubic metres of soil.

A VIEW of the Dredging Corporation of India's DR-XII dreding in the Palk Straits as part of the Sethusamudram Channel work.

Chennai , June 1

Hyundai Engineering's bid to dredge a section of the Sethusamudram Ship Canal Project has been cancelled and fresh tenders would now be called, according to the Union Minister of Shipping, Road Transport and Highways, Mr T.R. Baalu.

The Korean company, a subsidiary of automobile major Hyundai, had laid certain conditions and sought a mobilisation advance of Rs 200 crore from the Government.

"We did not accept this, and cancelled the bid. We have the right to cancel the bid at any stage," he told newspersons.

Fresh tenders would now be called by June 15 and a letter of intent issued in August. The selected company would start dredging in October and complete before November 2008, he said.

Project details

The Rs 2,427-crore project to create a 167-km canal connecting Palk Strait and the Gulf of Mannar involves four legs of dredging, and three are being finalised on the basis of a global tender.

The project involves dredging 82.5 million cubic metres of soil. One leg has been entrusted to the Dredging Corporation of India on a nomination basis to dredge 13 million cubic metres north of Palk Strait, and 5.34 million cubic metres have been completed, he said.

Tuticorin port projects

According to Mr Baalu, final approval for the Rs 150-crore second container terminal at Tuticorin port is likely to be given in July. The project has received environment clearance.

The Rs 685-crore inner harbour development at the port will soon be given administrative approval. The project involves increasing the draught and construction of five new berths, and is to commence by December.

There is also a plan to develop an outer harbour at a cost of Rs 3,200 crore on build, operate and transfer basis to construct a 2 km quay length to handle about one million TEU (twenty foot equivalent units), he said.

These projects are key to develop Tuticorin as a regional transhipment hub. With the development of Sethusamudram Ship Canal, the Tuticorin port, which is closest to the canal, needs to be developed in a major way, he said.

Chennai box terminal

On the second container terminal at Chennai, Mr Baalu said the Chennai Port Trust had sent its reply on security related issues to the Department of Defence. The projects at Chennai and Tuticorin are part of the National Maritime Development Scheme under which 276 projects were identified in the port sector costing Rs 55,000 crore and 111 in the shipping sector at a total cost of Rs 45,000 crore.

All the 276 projects would be completed by 2012 and the shipping sector projects by 2025 — latter have a long gestation period, he said.

According to Mr Baalu, Dr M. Anandakrishnan, former Vice-Chancellor of Anna University, Chennai, will head a committee to prepare a detailed project report on the national maritime complex coming up in Semmancheri, near Chennai.

The complex spread over 400 acres will have a number of facilities, including an academy of excellence in maritime studies.

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