JSW Infrastructure bid for Haldia berth

Mar 7, 2023 India Shipping News

MUMBAI : Sajjan Jindal-led JSW Group has submitted a bid for a 30-year concession to mechanise and operate a berth at Haldia Dock Complex (HDC), making it the second national operator after Adani to show interest in the port.

JSW Infrastructure, the maritime arm of the $22 billion JSW Group, is one of the four participants to the tender for Berth no. 5 (formerly 4B) at Haldia where an investment of about Rs 350 crore is entailed.

This is the second port development project in Bengal where JSW Group is engaging in a competitive selection process. The company had lost out to Adani Ports & Special Economic Zones (APSEZ) by a wafer-thin margin in a bid to develop the Tajpur Port in 2022.

Prior to winning the Tajpur bid, Adani had opened its shipping account in Bengal by securing the contract to mechanise Berth no. 2 at Haldia. JSW Infrastructure did not participate in the tender, which was opened in October 2021.

Adani has stayed away from the tender to mechanise Berth no. 5, which meant JSW is the only pan India operator vying for the port contract. The other entities in the fray include OSL, IRC and a consortium of Ripley & Co, port sources said.

Syama Prasad Mookerjee Port (SMP), Kolkata, which operates HDC, hopes to conclude the process to identify the successful bidder by September. The aspirants need to secure several permissions from the Centre, including a national security clearance, before submitting the price bid which will be called later.

“Yes, we have received four bids, including one from JSW Infrastructure, for the mechanisation of Berth no 5,” A. K. Mehra, Deputy Chairman (Haldia) for SMP, Kolkata confirmed.

JSW’s plan

Born out of the necessity to handle coal and iron ore to support its fledgling steel business, JSW Infrastructure is graduating to a full scale port operator with the ambition to serve third parties across the entire coastline of India.

At present, the company’s business is focused on the west and south coast, close to JSW Steel’s plants in Karnataka and Maharashtra. However, with the recent acquisition of operating iron ore mines, Bhushan Power & Steel Ltd in Odisha and Jindal’s ambition to set up a greenfield steel plant in the state, JSW Infra is beefing up operations on the east coast.

JSW Infra, which is likely to hit the capital market with an initial public offer later this year, has an operational capacity of 154 million tonnes (mt) and it envisions reaching 200mt capacity by 2024.

A terminal in Haldia can supplement JSW’s port assets in Paradip where it operates an iron ore terminal.

In contrast, the facility at Haldia, which offers unmatched rail connectivity with the steel-producing hinterland, may primarily focus on coal.

A JSW spokesperson did not comment on the company’s plan for Haldia.

The project

SMP, erstwhile Calcutta Port Trust, plans to give concession to the successful bidder for 30 years on design, build, finance, operate and transfer (DBFOT) basis. The optimal capacity of the berth is projected to be 5mt cargo per annum and the targeted cargo is bulk items such as coal, iron ore and manganese ore.

The scope of work, similar to what was proposed in Berth no. 2, envisages fully mechanised operation involving unloading from ship by a mobile harbour crane, putting the cargo on conveyor belt to yard and then loading on to railway rakes by wagon loading station.

The automated process will increase the cargo handling capacity by weeding out the existing semi-mechanised system in which the cargo is moved from the berth by truck to the yard and then loaded on to railway rakes by cranes. Faster evacuation of cargo would translate into savings on logistic cost for the trade.

However, it could also mean more ships sailing into the dock navigating the narrow riverine channel of river Hooghly from Bay of Bengal. Due to siltation on the riverbed, large ships cannot dock at Haldia, limiting cargo load up to 30,000 tonne per vessel. Maritime experts said the port has to find a way to widen the channel to be able to cope with more ships calling at the dock.