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Paradip Port Trust (PPT), which has witnessed drop in revenue due to dwindling iron ore exports, has issued new set of rules to boost revenue in its latest tender notice for auction of plots used for storage of iron ore inside port area.
Unlike the last year’s auction, the auction price of all the plots this time will remain uniform as all bidders will have to match the highest price offered by the top bidder.
PPT has recently floated tenders for 27 manual iron ore plots and 19 plots with mechanical loading/unloading facility. The port authorities have standardised the sizes of the plots for uniform pricing. The mechanical plots measure 5,000 square meter (sqm) each while manual plots will be of 3,000 square meter size. The base price of manual plots is Rs 9 per sqm while price of mechanical plots has been fixed at Rs 12 per sqm. However, the premium has been kept at Rs 525 per sqm for both categories of plots. The bidder has to quote rates over and above Rs 525 per sqm, the tender document said.
The port has kept Minimum Guaranteed Traffic (MGT) fee for manual plots at Rs 19.49 lakh and mechanical plots at Rs 48.21 lakh for minimum business of 74,000 tonne during the license period of 11 months. However, it has inserted a stringent measure in the minimum business criteria.
“If any party does not make minimum shipment of 19,000 tonne within four months from the date of issue of allotment order, the plot of the concerned party will be treated as cancelled and dues such as MGT and bid price paid for the year will be forfeited,” the tender document said. Many iron ore traders and exporters oppose the four-month time period for minimum business. “At a time when the government is discouraging exports, how can the PPT demand minimum business within four months?” asked an iron ore exporter.
As per traditional practice, iron ore plots were allotted to mineral traders and miners at fixed costs and their licenses for the plots were renewed every year with an increase of five per cent of base price.
The new rules say the plots will now be auctioned for 11 months period and no renewal will be permitted thereafter. The plots would be again put up for auction.
