Published On:December 16 2014
Story Viewed 1130 Times
Jindal, Adani among firms keen on Goa dredging project.
Four private firms led by the Jindal and Adani Groups have so far shown interest in the first dredging project to be undertaken on a public-private partnership (PPP) basis.
The project, at Mormugao Port in Goa, involves deepening the draft of its navigation channel from the existing 14.1 metres to 19 metres. The cost is estimated at about Rs. 300 crore.
Normally, capital dredging is done by ports at their own cost and in some cases with government support. For most ports in India, it is a recurring expense.
This is the first time that dredging is being made as a revenue generating project in the country.
The private party will not only bear the cost but also contribute to the port's income.
Shipping Minister Nitin Gadkari said this is an innovative approach to carrying out dredging to expand capacity in government ports. Interacting with delegates at the Inmarco 2014 conference here, he said the tender floated by Mormugao port has received responses from private firms such as Jindals and Adanis.
The project model, worked out by consultant SBI Caps, shows reasonable incremental rate of return on investment and it could be followed at other ports as well, he said.
A port official later said besides the Jindal Group and Adanis, two more -Mercator and International Seaport Dredging - have shown interest in the project. The port has convened a pre-bid meeting on December 16 to evaluate the initial response, he said. When the port has deep draft (water depth), it can handle large cape-size vessels of over 1.5 lakh dwt. It is estimated that importers of bulk cargoes such as coal, which Mormugao mainly handles now, can save at least $3 a tonne in freight charges if they carry them in bigger vessels. The terminal operator can collect higher port charges from bigger vessels. The additional charges will be the revenue of private parties who undertake the dredging work on a PPP basis. A fixed portion of the additional income will go to the port.
If everything goes as planned, the port hopes to award the project by March, said Cyril George, acting Chairman of Mormugao Port Trust.