JM Baxi Ports & Logistics-Indian Potash JV Signs Concession Agreement For Mechanization Of Bulk Berth At Port Of Vizag

Vizag Multipurpose Terminal Pvt Ltd, an equal joint venture between JM Baxi Ports & Logistics Ltd and Indian Potash Ltd, has a concession agreement with Visakhapatnam Port Authority for the mechanization and operation of a multi-purpose cargo berth at the state-owned port on a 30-year contract.

Visakhapatnam Port Authority Chairman K Rama Mohana Rao said that the Port Authority signed the concession agreement with Vizag Multipurpose Terminal.

A concession agreement sets out the terms of a port contract and sets the project in motion.

JM Baxi Ports & Logistics- Indian Potash team placed the highest royalty of 55.44 rupees per tonne for the project to emerge as a winning bidder from a Visakhapatnam Port Authority tender.

Port tenders in major ports (owned by the centre) are decided on the basis of royalty per tonne – the company willing to share with the port authority the highest royalty per tonne of cargo handled at the berth wins the deal for 30 years.

The license fee payable will increase annually along with the increase in the Wholesale Price Index (WPI), a measure of costs. The terminal operator is free to set market rates in accordance with the new Major Port Authority Act and the Model Concession Agreement (MCA).

Indian Potash Ltd – more than 70 percent owned by fertilizer cooperatives – is India’s largest fertilizer importer and the second largest buyer of fertilizers in the world market. Indian Potash imports fertilizer through all Indian ports and is the only company in India that handles fertilizer in all ports year-round.

This is the fourth recent contract win for JM Baxi Ports & Logistics at a major state-owned port. Mumbai-based JM Baxi Ports & Logistics, India’s third largest logistics company, last year secured contracts to operate container terminals at Jawaharlal Nehru and VO Chidambaranar ports (formerly Tuticorin Port) and the shallow water/coastal berths at JN Port.

The contract at Visakhapatnam Port involves the mechanization of the east quay berth 7 (EQ7) of the east coast port for handling of bulk cargo including fertilizers with private funds worth Rs 2.01 crore. After mechanization, the EQ7 berth will have the capacity to handle 3.61 million tons (mt) of cargo per year.

The project is part of the government’s national monetization pipeline (NMP), under which operational infrastructure assets, including port terminals, will be privatized via the public-private partnership (PPP) route.

JM Baxi Ports & Logistics operates a container terminal with a capacity of 1.5 million TEUs (Twenty-Foot Equivalent Units) separately at the port of Visakhapatnam.

A TEU is the standard size of a container and a common measure of capacity in the container business.

In January, German container shipping company Hapag-Lloyd AG announced it had signed binding agreements to acquire a 40 percent stake in JM Baxi Ports & Logistics Ltd for an undisclosed amount.

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