KPT set to privatise two berths

Move to take place within a month

Two existing berths of the government-controlled Kandla port will be handed over to private players within the next one months, KPT officials said.

Three companies have been shortlisted through a bidding process for the Rs 200 crore privatisation project, being implemented at the Kandla port for the first time.

According to A Janardhana Rao, chairman of the Kandla Port Trust, two of the existing 12 berths at the port will be handed over to a private operator, who will then set up a container terminal at the site.

"KPT will initially pump in Rs 150 crore for the container terminal, while the remaining Rs 50 crore will be invested by the private partner in the project," Rao told Business Standard.

He added that once the container terminal is set up, the private partner will pay a sum of Rs 40 crore every year, including an upfront fee, lease rent and other charges, to KPT for a period of ten years.

The board of trustees of Kandla Port Trust gave its approval for the draft licence agreement for the container terminal project on January 29. With this, private operators can set up a container terminal (CT) at Kandla Port on a BOT (build, operate & transfer) basis.

The terminal has been planned to be set up at berth numbers 11 and 12 with a designed draft of 13.5 metre, supported by an operational area of 40 hectares of land around the berths.

Two years ago, KPT had invited global tenders for the terminal project. The process had reached the final stage when the Union ministry of shipping stepped in and directed that the process be implemented through BOOT (build, operate, own & transfer) basis instead of BOT.

In other words, the ministry wanted the bidding party to build its own jetty and install its own equipment instead of the port giving the CT operator readymade berths with gantry cranes.

Later, KPT told the ministry there would be no takers for the new proposal as container terminal giant P&O Ports International had already set up the Mundra International Container terminal (MICT) at Mundra port. The government relented and permitted the use of the existing port jetties but without the port's gantry cranes.

"We are giving a platform to private operators and they will pay the upfront fee, lease rent and other charges which comes to a figure of Rs 40 crore a year, which will be beneficial for creating world class infrastructure facilities and enable the port to achieve the number one position in the country", said the KPT chairman.

He added that final discussions with the qualified bidders have been concluded and common acceptable conditions were sorted out. It has been realised that the future growth of container traffic needs to be tapped for sustained growth of the port in addition to improving upon its core activities of bulk, break bulk and liquid cargo handling.

On the issue of new container terminal project, the KPT chairman said, "With KPT's container terminal project and its early implementation, revenues of KPT will rise sharply and KPT will be better placed against other ports. KPT, at present, handles 1.8 lakh TEU (twenty equivalent unit) cargo in a year.

"With the new container terminal project, KPT will gain leadership position among Indian ports in a couple of years," added Rao.

KPT is also implementing projects on the gauge conversion of the railway line from Gandhidham to Palanpur and is also considering participation in the Bhiladi-Samdadi gauge conversion project to improving port connectivity. These projects are expected to enable faster movement of rakes.