Essar Ports is the lone bidder for the Rs 3,700-crore mega container terminal project at Chennai port. It has offered a revenue share of 5.25 per cent for the project, slightly above the 5 per cent Adani Ports offered in the earlier bid.
The two Indian groups — Essar and Adani — were the only bidders for the project, designed to handle four million 20-foot containers annually. Adani could not get security clearance on time, leaving Essar as the lone bidder, said a senior Chennai Port Trust (ChPT) official who did not want to be named.
The ChPT feels the revenue share offered by Essar was low and did not meet their expectations.
Low revenue share
The price bid for the project was opened today. “We feel the revenue share was too low. We will seek an increase from Essar,” the official said, without giving an indication of ChPT’s expectation from the bidder.
In the previous bid for the same project, Adani was the sole bidder, offering a revenue share of 5 per cent. This was rejected by the ChPT on the ground that the rate was too low.
The ChPT issued a fresh bid, in which seven companies entered the qualification stage. The final fight was between Adani Ports and Essar Ports.
The project is the biggest outside Gujarat for the winner. While Adani’s base is in Mundra, the Essar group has a strong presence in the Vadinar and Paradip ports. For the proposed ‘build, own and transfer’ project at Chennai port, the cost of dredging, floating craft and navigational aids — estimated at Rs 561 crore — will be borne by the port trust.
Cost split
The private operator will invest in berth and breakwater construction, reclamation of backup area, handling equipment and other landside infrastructure, spending about Rs 3,125 crore.
The terminal is to be developed north of the existing Bharathi Dock.
It will have two new breakwaters (total length 4.5 km), and a continuous quay length of 2 km, which will ultimately have a 22-metre alongside depth to handle ultra-large container ships of over 15,000 twenty-foot equivalent unit (teu) capacity and more than 400 metres in length.