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J M Baxi-CMA Terminals JV set to win the auction for container terminal run by JNPA

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MUMBAI : A consortium of J M Baxi Ports & Logistics Ltd (a unit of Mumbai-based J M Baxi Group) and CMA Terminals Holding, a subsidiary of CMA CGM SA, the world’s third largest container shipping firm, has emerged the highest bidder on a tender floated by Jawaharlal Nehru Port Authority (JNPA) to privatise the container handling terminal self-run by the State-owned port.

The equal joint venture between J M Baxi and CMA Terminals placed a price bid of Rs 4,520 per twenty-foot equivalent unit (TEU) when the price bids were opened on Tuesday, multiple sources said.

Port tenders at major ports (owned by the Centre) are decided on the basis of royalty per TEU: the entity willing to share the highest royalty per TEU with the port authority wins the deal for 30 years.

The royalty payable will rise annually in tandem with the increase in wholesale price index (WPI), a measure of costs. The terminal operator will be free to set market rates under the new Major Port Authorities Act and the model concession agreement (MCA).

The J M Baxi-CMA joint venture pipped other strong contenders such as D P World LtdTerminal Investment Ltd, a unit of Mediterranean Shipping Company S.A (MSC), the world’s biggest container line by capacity, JSW Infrastructure Ltd, Q Terminals W.L.L and Philippines-based International Container Terminal Services Inc.

Terminal Investment Ltd was the second highest bidder with a price quotation of Rs 4,293 per TEU.

The outcome of the bidding process for the Jawahar Nehru Port Container Terminal (JNPCT) will help J M Baxi Group, India’s biggest shipping services company, to enter Jawaharlal Nehru port, India’s biggest state-owned container gateway.

Besides, it will make J M Baxi the first local terminal operator to have a significant equity stake in a container terminal at J N Port.

J N Port has four private container terminals, two of them run by Dubai government-owned D P World Ltd, one each by PSA International Pte Ltd and a consortium of A P M Terminals Management B V and Container Corporation of India Ltd (Concor). In FY22, these terminals handled a combined 5.685 million TEUs.

J M Baxi Ports & Logistics runs container terminals at Visakhapatnam port, Deendayal Port (Kandla), Haldia Dock Complex, a multiple purpose terminal at Paradip Port, container freight stations, inland container depots, bulk logistics, rail logistics (container trains), cold chain logistics and heavy project logistics.

In FY22, J M Baxi Ports & Logistics handled about 1.6 million TEUs and about 15 million tonnes (mt) of cargo, across its facilities located on India’s western and eastern coasts.

The bid result is also a sweet revenge for J M Baxi Group which narrowly lost out to A P M Terminals – Concor team when Jawaharlal Nehru Port Authority privatised a terminal in 2004.

That bid was won by the A P M Terminals- Concor partnership which offered a revenue share of 35.5% to the port authority. A consortium of United Liner Agencies of India Pvt Ltd (a J M Baxi Group company) and Hamburg Port finished second with a price bid of 31.8%.

By partnering with a unit of one of the world’s top three container carriers, J M Baxi is seeking to ensure the success of the 1.8 million TEU-capacity terminal and meet the minimum volume stipulations set by JNPA for the contract.

JNPCT, the terminal that is undergoing privatisation, currently handles about 25-30,000 TEUs a month from three liner services.

JNPCT handled 440,210 TEUs in FY22 from 544,027 TEUs in FY21, a decline of 19.08%. The terminal can handle 1.35 million TEUs a year.

In the first two months of the current fiscal, JNPCT handled 55,063 TEUs, a decline of 34.33% compared to the same period last year.

JNPCT is the only container handling facility operated by a government-owned port authority across the 12 state-owned major ports in India.

In the last five years, JNPCT’s volumes have tumbled by about 70% from 1.53 million TEUs in FY17 to 1.48 million TEUs in FY18, 1.04 million TEUs in FY19, 718,863 TEUs in FY20, 544,027 TEUs in FY21 and 440,210 TEUs in FY22.

Its capacity utilisation has declined from over 100 per cent in FY17 to some 30% mainly due to the opening of two new private terminals at the port, both having quay cranes with a rail span of 30.5 metres, lifting capacity of 70 tonnes and outreach of 22 rows across.

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