Cargo tender at Mormugao Port collapses as Adani and JSW Infra stay away

The state-owned Mormugao Port Authority’s plan to privatize one of its cargo berths fell through after the two pre-qualified bidders – Adani Ports and Special EconomicZone Ltd (APSEZ) and JSW Infrastructure – failed to submit price bids despite multiple deadline extensions.

The Mormugao Port Authority, the company operating Mormugao Port in Goa, 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.

“APSEZ and JSW Infra have not submitted any price bids, even after allowing sufficient time for submission,” said a government official who was briefed on the bidding, indicating the bidding is likely to be halted.

Mormugao Port Authority will “inform” its board of the status of the tender and seek their suggestions/approval on how to proceed, he said.

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

Port industry sources said the outcome of the tender was “not surprising”.

“The market is uncertain and bidders are cautious,” said a port industry source, adding that the uncertainty has raised doubts about the feasibility of the project.

In addition, the port of Mormugao is struggling with the lack of reserve space for cargo storage and rail and road links for cargo evacuation, the industry source said.

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 iron ore mining ban in October 2012, which drastically curtailed the port’s export of the raw material and reduced the port’s total cargo by more than half.

The ban has now been lifted by the court subject to conditions, but the port has not yet recovered from the shock.

Mormugao Port was the only major port among dozens owned by the Union government to record negative traffic growth in FY23. Cargo handled by Mormugao Port shrank 6.2 percent to 17.319 million tons in FY23 from 18.466 million tons in FY22.

In the first quarter of fiscal 2024, the Port of Mormugao handled 4,923 tons of cargo, up 3.34 percent from the 4,764 tons handled in the same period last year

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