Adani Ports and JSW Infra are vying for cargo deals at Mormugao Port

Adani Ports and Special Economic Zone Ltd (APSEZ) and JSW Infrastructure Ltd are competing for two separate cargo handling contracts at the port of Mormugao as the west coast port seeks private firms to operate cargo handling facilities, in line with the government’s plan to move major ports in Landlords to convert ports are subject to the new law that governs state ports.

Mormugao Port Authority, the state-owned company operating Mormugao Port, had solicited bids from private companies to redevelop Berth 9 along with three inland berths with a capacity to handle 12 million tonnes (mt) of cargo, with public investment amounting to of Rs. 842 crore transacted -Private Partnership (PPP) basis.

The successful bidder will be allowed to handle iron ore and other cargo excluding containers, coal and general cargo for 30 years.

Berth 9 has not been operational since 2012 when the Port Authority dismantled the mechanized iron ore handling equipment such as reclamation stackers and bunker loaders after the Supreme Court banned the export of the steelmaking good from Goa.

The berth is occasionally used for handling granite and bauxite cargo while the three inland berths are used for parking vessels including those of the Indian Coast Guard.

The port of Mormugao, once India’s main iron ore export port, was hit by Goa’s ban on iron ore mining from October 2012, which severely curtailed exports of the commodity through the port.

The ban has since been lifted by the court subject to conditions.

After months of delay, the Union government recently granted security clearance to APSEZ and JSW Infrastructure, clearing the decks for the port authority to call price bids for the project, officials said.

APSEZ, JSW Infrastructure and Delta Infralogistics (worldwide) Ltd have applied in a separate tender from Mormugao Port Authority to select a private company to operate and maintain Berths 10 and 11 in PPP mode for 30 years.

The two projects are part of the National Monetization Pipeline (NMP), under which operational infrastructure assets, including port terminals, will be privatized via the public-private partnership (PPP) route.

Mormugao Port was the only major port to experience negative traffic growth in FY23. Cargo handled by Mormugao Port fell 6.2 percent to 17.319 million tons in FY23, compared to 18.466 million tons in FY22.

Berth 10 currently handles general cargo and petroleum and lubricants (POL), while berth 11 handles general cargo with a total capacity of 6.4 million tons.

The successful bidder will have to invest around 130 million rupees in cargo handling equipment.

In order to attract broader participation from bidders for the privatization of Berths 10 and 11, the Mormugao Port Authority has adjusted the qualification rules that allow Delta Infralogistics, a stevedore company, to bid in the tender, a port official said.

Stewardships are companies contracted directly by the exporters and importers, on the basis of competitive bids, to load and unload cargo at non-mechanised, shared berths operated by the port authorities themselves.

However, these companies will be affected by the government’s decision to allow PPP carriers to handle multiple cargoes at their facilities – abandoning the previous practice of allowing single cargo handling.

Dockers state that they would like to enter the major port authorities’ privatization bids to stay in business, but the qualification criteria stood in the way as they set strict financial parameters in terms of net worth, turnover, etc.

Under the Major Port Authorities Act 2021, the publicly managed port authority acts as regulator and lessor, while private companies carry out port operations, mainly cargo handling.

In return, the rental port receives a share of the income from the private facilities.

As all port authority-operated cargo berths are expected to be privatised, cargo previously handled by stevedores will be handled by PPP operators licensed to handle multiple cargoes, provoking strong criticism from stevedores.

“We have set the qualification criteria for the privatization of berths 10 and 11 to accommodate dockers and increase competition. Otherwise, the same companies applied for PPP projects,” the Mormugao Port official added.

Contracts are awarded to the company that pays the highest royalty for each tonne of cargo handled at the berths and shares it with the Port Authority.

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