From THE HINDU group of publications
Thursday, November 22, 2001


CSX Corp keen on Vallarpadam project

P. Manoj

NEW DELHI, Nov. 21

SPRINGING a surprise, which the embattled Shipping Ministry was looking for, CSX Corporation an American company, has evinced interest in developing the proposed mega container transhipment terminal at Vallarpadam in Kochi port estimated to cost Rs 1,873 crore.

But, there is a rider. The company will participate in developing the project if it is re-tendered without resorting to the open tender route, Government sources told Business Line.

The Shipping Ministry has sprung into action to break the dilemma over the lone price bid submitted by P&O Ports for developing the Vallarpadam project, based on a word of assurance from CSX Corporation as well as on hopes that a couple of more operators will bid following road shows to be held shortly in Malaysia and Singapore by the Union Shipping Minister, Mr Ved Prakash Goyal.

Mr Goyal has received an official invitation from the Governments of Malaysia and Singapore to visit the two countries, which has a strong presence of private and Government-owned container terminal operators.

The schedule for the Minister's visit will be finalised soon and would probably take place after the winter session of Parliament.

Having firmed-up one part of its plan, the Shipping Ministry is working on the other part by starting the process of preparing a note seeking approval from the Union Cabinet to re-tender the project, by-passing the open tender route on the basis of assurances from private operators to participate in the fresh round of bidding, sources said.

By skirting the open tender route for re-tendering the project, the Shipping Ministry plans to compress the time-frame in awarding the project which is reckoned to be delayed by at least a decade after passing through three rounds of bidding starting from the late 1980s.

Having a panel of three would do this or more private operators from whom financial bids will be invited on the basis of certain non-negotiable terms framed by the Government.

While nine parties had purchased the tender documents for developing the project when it was put to tender in 1998, only P&O Ports eventually submitted the price bid.

The Shipping Ministry has, however, put on hold a final decision on awarding the project to the lone bidder in view of the dynamics associated with the bid of P&O Ports.

While the lone bid of P&O Ports would not be cancelled till the outcome of the fresh round of tendering is known, P&O Ports will be barred from participating in the re-bidding process, sources said.

Due to the involvement of P&O Ports in running the near-by Colombo container terminal, the Shipping Ministry feels that the presence of a different operator at Kochi port would ensure sufficient competition between the two players to develop the project to its full potential.

This will, in turn, ensure that Kochi port is developed into a hub port on the West Coast besides having competitive tariffs to lure more and more container traffic from Colombo to Kochi.

The Ministry is of the view that P&O Ports should be involved in either Colombo or Kochi, but not both because the two ports lie on the main shipping line and are equi-distant or next door to one another.

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