Chinese turned away from ports

Proposal of Hutchison Port, 2 others rejected on security grounds.

After months of dithering, the government has finally denied security clearance to three Chinese firms for operating in the Indian port sector.

The three companies "" Hutchison Ports Holdings, Kaidi Electric Company, and China Harbour Engineering Company "" had evinced interest in three port projects worth Rs 6,000 crore.

Sources close to the development said the Chinese proposals were turned down on the ground of a potential security threat to marine installations. Ports were considered as a second line of defence and security at such locations was of paramount importance, they said.

Hutchison Ports, in association with Larsen & Toubro, had bid for the Rs 1,200-crore offshore container terminal at Mumbai Port Trust (MbPT), and the Rs 500-crore container terminal at Chennai Port Trust (ChPT).

Kaidi Electric Company and China Harbour Engineering Company had also sought security clearance from the government for developing the Rs 4,300-crore international trans-shipment container terminal at Vizhinjam, Kerala. These companies have tied up with Mumbai-based Zoom Developers.

Hutchison Ports, a wholly owned subsidiary of Hutchison Whampoa Ltd, was earlier debarred from bidding for the third container terminal project at Jawaharlal Nehru Port Trust (JNPT).

Kerala Port Minister M Vijayakumar confirmed that the government had denied security clearance to the Chinese firms.

"We are waiting for guidance from the central government on how to take the project ahead now," he said.

Industry sources said the Kerala government was exploring the option of floating a global tender for the Vizhinjam project.

The hitch in security clearance for Chinese firms has led to a delay in the implementation of the Kerala port project by six months.

The projects for Mumbai and Chennai ports have also been delayed by more than one and a half years. The Mumbai Port alone has extended the bidding deadline for the Rs 1,200-crore box terminal project 12 times.

"Though Mumbai Port has proposed the Manila-based International Container Terminal Services Inc (ICTSI) as an alternate terminal operator in place of Hutchison, the government has not taken any decision on it," a government official said. When contacted, port officials declined to comment.