The Jawaharlal Nehru Port Trust (JNPT) has issued a global tender on August 31, 2021 to privatise the Jawaharlal Nehru Port Container Terminal (JNPCT) in Mumbai, after it received approval by the Ministry of Ports, Shipping and Waterways. The tender is worth $117 million and it offers public-private partnership model and the successful bidder will get the container terminal for 30 years along with a free hand to set rates at the terminal based on market forces.
JN Port Container Terminal (JNPCT), one of the five container terminals operating at JNPT that handled 5,44,027 TEUs in FY21 from 7,18,863 TEUs in FY20. The terminal can handle 1.35 million TEUs a year. The pot trust has received permission from the government to introduce special voluntary retirement scheme (SVRS) for JNPT employees from September 1, 2021.The privatisation project includes berth upgradation, and replacement and/or deployment of other equipment. SBI Caps is acting as transaction advisor for privatisation of JNPT’s container terminal.
The bid attracts global terminal operators’ attention
The bid has prompted terminal operators worldwide to line up as contenders for the bid as they are keen to establish a presence in India’s busiest state-owned container gateway. Top contenders for the JNPT bid include Terminal Investment Ltd (TIL), Abu Dhabi Terminals, APM Terminals Management B V, JSW Infrastructure Ltd, and DP World Ltd. the top three bidders among all the operators include DP World, TIL backed by Adani Ports and Special Economic Zone Ltd (APSEZ), and APM terminals.
Incidentally, DP World, one of the strong contenders for the bid, already operates two of the five terminals at the JNPT port – NSICT and NSIGT. If DP World wins the JNPCT tender, it could reap extraordinary profits by adding 680 meters to its berthing length as all three terminals are lined consecutively and this will also allow it to merge terminal yards. But if DP World loses the bid then there is a chance of the operator abandoning NSICT and NSIGT terminals after the expiry of existing contracts in 2028.
TIL, another strong contender for the bid, is supported by APSEZ plans to take control of NSIGT and NSICT terminal after 2028. The operator’s association with MSC not only guarantees that it comes across the minimum volume conditions of the tender released by JNPT but secures container traffic at the terminal in the future.
However, there is a worry that haunts the container terminal bidders that is the fear inadequate traffic at the terminal in the future. As it is based on assumptions of container volume shrinkage of up to 18,000TEU after one of the four liners availing service at the terminal shifts to the BMCTPL facility which will build an additional 1 km of berthing length.
Such fears however, have prompted APM Terminals, another strong contender for the bid, who operates along with CONCOR, JNPT’s GTI box terminal to search for another shipping line as its partner to secure profits from the deal.
It’s only the time which can reveal the successful bidder among these three terminal operators for the JNPCT. The successful bidder will be able to secure enough profits over 30 years from the contract.
