MUMBAI : A consortium of Indian Potash Ltd and J M Baxi Ports & Logistics Ltd is set to win the rights to mechanise and run a multi-purpose cargo berth at State-owned Visakhapatnam Port by emerging the highest bidder for the 30-year contract.
The India Potash-J M Baxi Ports & Logistics team placed the highest royalty of Rs55.44 a ton for the project when the price bids were opened on Saturday, a port official said.
Indian Potash Ltd – more than 70 percent owned by fertiliser co-operatives – is India’s biggest fertiliser importer and the second largest buyer of fertilisers in the global market. Indian Potash imports fertilisers through all the Indian ports and it is the only company in India which handles fertilisers throughout the year at all ports.
“The joint venture between Indian Potash and J M Baxi Ports & Logistics will create a long-term sustainable partnership for fertiliser handling at Visakhapatnam Port,” the port official mentioned earlier said.
Port tenders at major ports (owned by the Centre) are decided on the basis of royalty per ton – the entity willing to share the highest royalty per ton of cargo handled at the berth 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).
This will be the fourth contract win for J M Baxi Ports & Logistics at a State-owned major port in recent times. Mumbai-based J M Baxi Ports & Logistics, India’s third most valued logistics company, secured contracts last year to run container terminals at Jawaharlal Nehru Port and V O Chidambaranar Port (formerly Tuticorin Port) and the shallow water/coastal berths at J N Port.
The contract at Visakhapatnam Port involves mechanising the eastern coast port’s East Quay berth 7 (EQ7) for handling cargo including fertilisers with private funds worth Rs201 crores. When mechanised, the EQ7 berth will have a capacity to handle 3.61 million tonnes (mt) of cargo a year.
The project is part of the national monetisation pipeline (NMP) of the government wherein operational infrastructure assets including port terminals will be privatised through the public-private-partnership (PPP) route.
J M Baxi Ports & Logistics runs a 1.5 million twenty-foot equivalent units (TEUs) capacity container terminal at Visakhapatnam Port.
On 25 January, German container shipping line Hapag-Lloyd AG said it has signed binding agreements to acquire a 40 percent stake in J M Baxi Ports & Logistics Ltd.