Business Standard reported that the Chennai Port Trust has asked Essar Ports, the sole bidder for the INR 3,683 crore container terminal project at Chennai, to reconsider its offer that had offered a revenue share of 5.25%.
A senior board member of the Chennai Port Trust said that in a recent board meeting, it was decided to set up a negotiation committee to review the bid amount. We have not come to a conclusion what the percentage should be, we will wait for the company to come back.
Chennai port is one of the 13 owned by the government of India. Adani Ports and Special Economic Zone Limited had shown interest in the project twice. For the first time, it was rejected due to the low bid and, second time, due to security clearance.
According to a senior port official, Essar Ports has offered a revenue share of 5.25%, which is slightly higher than Adani Ports’s earlier bid of 5%. The official added the revenue share offered was too low and the Port Trust was planning to ask Essar Port to increase the share.
Essar and Adani were the two final contenders, while seven companies entered the qualification stage for the container terminal project, which will have a capacity to handle 4 million twenty foot equivalent units per annum.
Of the total project cost, Chennai Port Trust’s share will be INR 561 crore, while the private partner, who will build, own and transfer the project, will invest INR 3,125 crore.
The proposed investment includes INR 963 crore towards breakwater, INR 362.25 crore for dredging, INR 496.80 crore to construct berths, INR 124.20 crore for reclamation and the rest is for others.
Essar Ports Limited develops and operates ports and terminals and is one of the largest private sector port companies in India by capacity and throughput. It provides services for liquid, dry bulk, break bulk and general cargo. If the company gets the container terminal project at Chennai, this will be first container terminal project.
