Security clearance hurdle for China firms to hit port projects

Denial of security clearance to three Chinese firms has taken its toll on the country's port projects worth Rs 6,000 crore.

Hutchison Ports Holdings, Kaidi Electric Company and China Harbour Engineering Company have been denied security clearance for participating in container terminal projects at the ports in Mumbai, Chennai and Vizhinjam (Kerala).

As a result, the Mumbai Port Trust (MbPT) has now extended the bidding deadline for its Rs 1,200 crore offshore container terminal to September 15 from August 31. Interestingly, this is the thirteenth extension for this project.

Engineering and construction major Larsen & Toubro (L&T) had tied up with Hutchison to bid for the project in Mumbai Port. Following the denial of security clearance, L&T has roped in Manila-based International Container Terminal Services Inc (ICTSI) as an alternate terminal operator in place of Hutchison.

"Government is yet to give clearance to ICTSI and has asked the port to extend bidding deadline by 15 days, causing further delay. However, this seems to be a final extension," a government official told Business Standard.

At the Chennai Port the scene is different. L&T had already submitted the bids for Chennai Port's Rs 500 crore second container terminal project with Hucthison as management contractor.