Singapore’s PSA International Pte Ltd and a consortium led by Bollore Africa Logistics SAS have been disqualified from bidding on a global tender to convert a bulk cargo berth into a container terminal at the Centre-owned VO Chidambaranar Port Authority, as they face contract terminations and adverse court rulings in other ports.
PSA Sical Terminals Ltd, the entity running the container terminal from Berth No 7 at VOC Port since 1998, owes the port authority about ₹1,250 crore in royalty arrears.
On January 20, VOC Port issued a termination notice on the operator, following an adverse ruling by the Madras High Court on January 19 on its petition to settle royalty payment issues.
PSA Sical is 51 per cent owned by PSA International Pte Ltd, a unit of Temasek Holdings Pte Ltd, the sovereign wealth fund of Singapore.
The consortium of Bollore Africa Logistics and India Ports and Logistics Pvt Ltd has been disqualified over contractual troubles it faces at other ports, VOC Port officials said.
India Ports and Logistics is 51 per cent owned by Star Ports Ltd, a unit of Mumbai-listed Starlog Enterprises Ltd (earlier known as ABG Infralogistics Ltd), with Bollore Africa Logistics holding the rest. It runs the Dakshin Bharat Gateway Terminal Pvt Ltd from Berth No 8 at VOC Port.
Bollore Africa Logistics challenged its disqualification in the Madurai bench of Madras High Court but lost.
Eligibility in question
PSA International and the Bollore Africa Logistics-India Ports and Logistics consortium did not meet a key eligibility condition in the tender, VOC Port officials said.
“An Applicant including any Consortium Member or Associate should, in the last 3 years, have neither failed to perform on any contract, as evidenced by imposition of a penalty by an arbitral or judicial authority or a judicial pronouncement or arbitration award against the Applicant, Consortium Member or Associate, as the case may be, nor has been expelled from any project or contract by any public entity nor have had any contract terminated by any public entity for breach by such Applicant, Consortium Member or Associate,” according to the tender conditions.
Other Indian port authorities are expected to cite PSA’s troubles at VOC Port to deny participation in cargo terminal tenders. Aside from VOC Port, the global port operator owned by the Singapore government also runs terminals at Jawaharlal Nehru Port and Chennai Port.
Some state-run port authorities have terminated concessions awarded to joint ventures involving ABG for contract breaches that have ended in litigations.
State-owned Visakhapatnam Port Authority terminated the concession awarded to a joint venture between ABG Infralogistics Ltd and French shipping group Louis Dreyfus Armateurs SAS, for development of EQ7 berth to handle fertilizers, citing tardy progress in the project. Further, the same team abandoned the contract for developing and operating a multipurpose cargo berth at WQ6 in Visakhapatnam Port Trust.
A bankruptcy court in Mumbai has initiated insolvency proceedings against Tuticorin Coal Terminal Pvt Ltd on a petition brought by Bank of India to recover unpaid dues of ₹90.87 crore after the facility was “abandoned” by the same partnership. The terminal owes ₹355.79 crore to a clutch of seven banks led by Bank of India.
The privatisation of Berth No 9 into a container terminal, with an investment of ₹434.17 crore will boost VOC Port’s container handling capacity by 6 lakh twenty-foot equivalent units (TEUs) a year to 1.8 million TEUs.
Source : The Hindu Businessline
