DPA Plans Restructuring for Tuna Multipurpose Berth as Bidders Decline

The state-owned Deendayal Port Authority, operating the port in Kandla, Gujarat, is contemplating the cancellation of a tender, the second in the last 15 months, for the construction of a multipurpose cargo berth at its satellite facility in Tuna Tekra. The tender, valued at Rs. 1,719.22 crore and attracting private funding, is likely to be scrapped due to a lack of bidder interest. A fresh tender is expected to be floated after restructuring the project.

Multiple sources indicate that the Ministry of Ports, Shipping, and Waterways, along with the Deendayal Port Authority, is considering a phased development approach after canceling the current tender. The greenfield project, designed to handle 18.33 million tonnes (mt) of cargo, faces challenges in the current market conditions, prompting a reassessment of its structure.

JSW Infrastructure Ltd, the ports unit of JSW Group, was the sole entity expressing preliminary interest in the project. However, even JSW Infrastructure withdrew from the bid after putting forth certain conditions. The project is set to be discussed in a meeting led by Sarbananda Sonowal, Minister of Ports, Shipping, and Waterways, with top officials of the 12 state-owned major ports on November 17.

While potential bidders have stayed away, industry experts cite factors such as reduced demand, competition from existing facilities, and global shifts from bulk and break-bulk cargo to containerized cargo as potential reasons. The port industry consultant notes that containerization is likely to rise, while bulk, break-bulk, and multi-purpose cargo may witness a decline in the coming years.

Despite the challenges, the government remains committed to the project and aims to explore options to attract bidder interest. The Deendayal Port Authority floated a fresh tender on June 30, 2023, to build the multipurpose cargo berth at Tuna Tekra under a public-private-partnership (PPP) model for a duration of 30 years.

The planned facility aims to handle various cargoes, including food grains, fertilizers, coal, ores and minerals, and steel cargo. Deendayal Port currently operates 16 cargo berths, and the new berth is intended to accommodate ships of up to 100,000 deadweight tonnes (DWT) with a draft of up to 15 meters. The project aligns with the port's strategy to address the gap between projected traffic and allocated traffic, catering to the expected recovery in economic growth, growing dry cargo traffic, and the over-utilization of existing dry cargo handling infrastructure.

ET