Deendayal Port Authority Scraps Mega Shipbuilding Cluster Tender After Receiving Lone Bid.

The Deendayal Port Authority (DPA), the state-owned entity managing the port at Kandla, has annulled a tender for developing an integrated shipbuilding cluster on a vast 2,000-acre parcel of land. The tender, intended to attract private investment for the project, was scrapped after receiving only a single bid from Pune-based Accurate Industrial Controls Pvt Ltd, supported by Korea Maritime Consultants Co., Ltd (KOMAC).

According to sources familiar with the tender process, the Deendayal Port Authority "discharged the tender" and did not proceed to open the price bid submitted by the Accurate Industrial Controls – KOMAC joint venture.

The port authority now intends to re-tender the project, with plans to revise the minimum qualification criteria for prospective bidders. The original tender documents stipulated that interested entities should have directly, and not through a joint venture or consortium, designed, executed, and constructed a shipyard capable of producing Very Large Crude Carrier (VLCC) class ships to qualify for the auction.

Sources indicated that the tender was specifically structured to attract major shipbuilders from South Korea. However, South Korean yards are reportedly more inclined towards investing in Indian shipbuilding facilities through joint ventures rather than direct investments. During the pre-bid meetings, some potential Indian bidders had requested a relaxation of the qualification criteria to permit participation through joint ventures or consortia, citing the lack of domestic entities with the standalone capability for a project of this magnitude.

Although the DPA initially maintained its stance on the direct experience requirement, it later allowed entities to form joint ventures or consortiums. However, sources suggest that the minimum qualification criteria itself was not modified to explicitly include experience through joint ventures, which ultimately did not benefit potential bidders. The port authority was also reportedly "not comfortable" with the sole bid received, perceiving the Indian partner as "not up to the mark."

The upcoming re-tender is expected to clearly outline the revised minimum qualification criteria for bidders. This planned shipbuilding cluster is a key part of the government's push to boost the country's shipbuilding sector and is the first greenfield shipyard of this scale planned in over 17 years.

The initiative aligns with the broader measures announced by Finance Minister Nirmala Sitharaman in the recent Union Budget to bolster the maritime industry. These include a ₹25,000 crore Maritime Development Fund (MDF), a revamped shipbuilding financial assistance policy, credit notes for shipbreaking in Indian yards, and granting infrastructure status to large ships.

Furthermore, the Budget extended the exemption from Basic Customs Duty (BCD) on raw materials, components, consumables, or parts used in the manufacture of ships and for shipbreaking for another 10 years, starting from April 1, 2025. The government aims to facilitate the development of shipbuilding clusters to enhance the range, categories, and capacity of ships, supported by additional infrastructure, skilling initiatives, and technology adoption.\

India currently holds less than 1 per cent of the global shipbuilding market but has set ambitious targets to enter the top 10 by 2030 and the top five by 2047. This push comes at a time when the global shipping industry is expected to require over 50,000 new ships in the next 30 years, particularly as it transitions towards greener technologies to reduce emissions. The land parcel at DPA was offered on a maximum 30-year lease, with a provisional reserve price of ₹27,510 per acre per year.