• PAGE ONE
• INDEX
• HOME

Vallarpadam container terminal -- Cochin Port Trust to discuss P&O bid

P. Manoj

NEW DELHI, Aug. 28

THE Board of Trustees of the Cochin Port Trust, at a meeting scheduled for August 30, will consider the lone financial bid of P&O Ports, Australia, to develop the Rs. 600-crore container terminal at Vallarpadam.

Government sources told Business Line that the proposal submitted by P&O Ports was listed on the agenda of the Board of Trustees meet slated for August 30. ``If cleared by the board, the proposal would be forwarded to the Union Ministry of Surface Transp ort for final approval '', the sources said.

The project involves modernisation of the existing Rajiv Gandhi container terminal at the port and the development of a greenfield transhipment terminal at Vallarpadam at an estimated cost of Rs. 600-crores ($140 millions) catering to an additional capac ity of five million tonnes.

While most of the issues raised by the private operator relating to the project have been sorted out, the Cochin Port Trust is still negotiating with P&O Ports the quantum of royalty quoted by the bidder in the financial bid.

The Port Trust said that the royalty per tonne of cargo handled quoted by P&O Ports, particularly in the first 10 years of operating the project, was lower than the estimates worked out by the port trust, the sources said.

After negotiations, P&O Ports may be asked to revise their price bids since it was the lone bidder which had qualified up to the financial bidding stage.

Meanwhile, the Cochin Port Trust has invited tenders on behalf of Goshree Island Development Authority, a Kerala Government undertaking, to award the work of building roads and bridges linking the proposed Vallarpadam Load Centre (VLC).

The Kerala Government has agreed to implement the construction of three bridges connecting three islands with the mainland as well as the road connectivity with the VLC costing about Rs. 80 crores. The Goshree Island Development Authority has been entrus ted with the task of arranging finances for implementing the road and bridge works.

The Port Trust has also started the work of dredging and reclamation of the port channel to facilitate the movement of fourth and fifth generation vessels.

Concor, an Indian Railway subsidiary, has agreed to provide rail connectivity to the VLC, estimated to cost around Rs. 60 crores, provided the investment is justified in terms of adequate and assured traffic.

The option of setting up a special purpose vehicle (SPV) between Concor and the Container Terminal Project Company which will be a joint venture between the Port Trust and P&O Ports is also being explored. In this way, the risk arising out of a dip in tr affic volumes could be shared between all the three parties involved in the SPV and make the rail link project viable.

P&O Ports had made it clear after tough bargaining that the move from the existing Rajiv Gandhi container terminal to VLC by 2005 as stipulated by the Port Trust in the tender documents would be conditional upon the construction of key back-up infrastruc ture facilities like roads,bridges and rail linkages with VLC by the time the shift takes place.

P&O Ports was initially opposed to the shift from the existing container terminal to VLC by 2005 stating the development of the proposed load centre was not viable.

With the preliminary work on all the three areas (roads, bridges and rail links) firmly in place, the Cochin Port Trust has decided to seek the concurrence of its board of trustees before forwarding the financial bid of P&O Ports to the Union Government.