Mundra puts in fresh bid for Chennai facility
Mundra Port and Special Economic Zone Ltd (MPSEZ) has put in a revised price bid to Chennai Port Trust to build a US$681.27 million container handling facility, reported The Mint.
The port authorities decided to renegotiate an earlier bid with India's biggest private port operator as the quotation submitted was too low.
MPSEZ, the only entity to submit a price bid from a list of seven, had offered a revenue share of 1.5 percent to Chennai port in September to develop and operate the new terminal with a capacity to load four million standard containers a year.
This is the lowest revenue share quoted by a private firm to a state-owned port in the history of India's container port
privatisation programme that began in 1997.
According to the privatisation policy, an entity or group willing to share the most from annual revenue with a government-owned port gets the contract, typically for 30 years.
At a meeting on 24 November, the board of trustees of Chennai port discussed the price bid submitted by MPSEZ and decided to set up a committee to renegotiate a higher price bid with the firm promoted by Ahmedabad-based Adani Group.
"The committee had discussions with the firm on the reasons for the low price bid and cleared some of their apprehensions. After this, we told MPSEZ to put in a revised price bid, which was submitted on 10 December," a spokesman for Chennai Port Trust said. "The revised price bid will be opened soon."
"We can't make any comment on that (the revised price bid)," said Rajeeva Sinha, a director at MPSEZ, citing a confidentiality clause signed with the port.
Vijay Sarma, a director at Deloitte Touche Tohmatsu India Pvt. Ltd, attributed the depressed bidder interest and low price bid to the "high project cost and a potential slow traffic build-up due to competition". "A lot of supply is being created in and around Chennai, and demand will take a time to build up," he said.
The port authorities decided to renegotiate an earlier bid with India's biggest private port operator as the quotation submitted was too low.
MPSEZ, the only entity to submit a price bid from a list of seven, had offered a revenue share of 1.5 percent to Chennai port in September to develop and operate the new terminal with a capacity to load four million standard containers a year.
This is the lowest revenue share quoted by a private firm to a state-owned port in the history of India's container port
privatisation programme that began in 1997.
According to the privatisation policy, an entity or group willing to share the most from annual revenue with a government-owned port gets the contract, typically for 30 years.
At a meeting on 24 November, the board of trustees of Chennai port discussed the price bid submitted by MPSEZ and decided to set up a committee to renegotiate a higher price bid with the firm promoted by Ahmedabad-based Adani Group.
"The committee had discussions with the firm on the reasons for the low price bid and cleared some of their apprehensions. After this, we told MPSEZ to put in a revised price bid, which was submitted on 10 December," a spokesman for Chennai Port Trust said. "The revised price bid will be opened soon."
"We can't make any comment on that (the revised price bid)," said Rajeeva Sinha, a director at MPSEZ, citing a confidentiality clause signed with the port.
Vijay Sarma, a director at Deloitte Touche Tohmatsu India Pvt. Ltd, attributed the depressed bidder interest and low price bid to the "high project cost and a potential slow traffic build-up due to competition". "A lot of supply is being created in and around Chennai, and demand will take a time to build up," he said.
