GANDHIDHAM : Deendayal Port Authority, the state-owned entity that runs the port located at Kandla in Gujarat, will likely scrap a tender – the second in the last 15 months – to build a multi-purpose cargo berth at its satellite facility located at Tuna Tekra with private funds of Rs1,719.22 crore due to lack of bidder interest and float a fresh tender after restructuring the project, multiple sources said.
The Ministry of Ports, Shipping, and Waterways and Deendayal Port Authority have discussed the possibility of restructuring the project a couple of days ago by developing it phase-wise after cancelling the current tender, which has been extended multiple times, a Ministry official said.
The port authority reckons that the current structuring of the greenfield project, with a capacity to handle 18.33 million tonnes (mt) of cargo, has very little scope for success given the huge investments involved in an uncertain market, a second source said.
The project will figure in a meeting called by Shri Sarbananda Sonowal, Minister of Ports, Shipping, and Waterways with top officials of the 12 state owned major ports on 17 November, the source said.
JSW Infrastructure Ltd, the Mumbai-listed ports unit of JSW Group, was the only entity to show preliminary interest in the project. “JSW Infrastructure had put some conditions for participating in the bid, but finally they also backed out,” the source said, adding that the tender has reached a dead end.
“Maybe the demand is less,” said a port industry consultant, on why potential bidders stayed away from participating in the tender.
Besides, the dry bulk cargo terminal run by Adani Ports and Special Economic Zone Ltd (APSEZ) at Tuna Tekra has a capacity to handle 14 mt. This terminal is expected to handle 10 mt this fiscal. “So, the capacity is still unexplored,” the port industry consultant said.
The port authority also has no legal basis to say that its coal cargo will be diverted to the proposed Tuna Tekra project.
“Deendayal Port Authority cannot do this as a public port. It has struggled with this question for a long time and realised that’s a problem. So, there is no cargo guarantee that the port authority can give to the private operator,” the consultant observed.
Further, war has broken out in some places across the globe and the trend of break-bulk cargo getting converted into containerized cargo has also cast a shadow over the project.
Containerisation will rise and container terminals will survive but bulk, break-bulk and multi-purpose cargo may see a decline in the coming years, the consultant added.
In FY22, Deendayal Port handled a lot of break bulk cargo only because there was a container crisis.
“Because of COVID, containers got jammed at different places. So, they shifted to break bulk, otherwise there is not much future for break bulk,” the consultant added.
The government, though, is serious about the project and wanted to explore options to attract bidder interest, the source added.
The port authority that runs India’s biggest state-owned port by cargo handled and the nation’s second largest overall, floated a fresh tender on 30 June this year to build the multipurpose cargo (other than container/liquid) berth off Tuna Tekra outside Kandla Creek on public-private-partnership (PPP) mode for 30 years.
Kandla port serves the Northern India hinterland, including the land-locked states of Jammu and Kashmir, Uttar Pradesh, Madhya Pradesh, and Gujarat.
The present optimal handling capacity of the existing dry cargo berths at Deendayal Port, including barge jetties at bunder basin, Tuna and IFFCO Barge Jetty (excluding containers), is 59.96 mt.
In FY23, the dry cargo berths handled 41.65 mt (excluding containerized cargo).
The port authority is seeking to build additional facilities to cater to the expected recovery in economic growth of the country, steadily growing dry cargo traffic and over-utilized dry cargo handling infrastructure at the port.
The gap between the projected traffic and allocated traffic has been estimated based on the traffic forecast from FY 2021 to FY 2030. The projected traffic gap by the year 2026 is 2.85 mt and by 2030 is 27.49 mt.
The planned facility will be designed to handle food grains, fertilizers, coal, ores and minerals, steel cargo etc. Deendayal Port currently has 16 cargo berths. The new berth will be built to handle ships of up to 100,000 deadweight tonnes (DWT) and up to 15 metres draft.
Source : ET Infra