PSA quoted a rate of Rs1,748 for handling a loaded container to emerge the lowest bidder for the operation and maintenance contract
Bangalore: Singapore’s PSA International Pte Ltd has won a container-handling contract at Union government-owned Kolkata port, which will help the firm boost its presence on India’s eastern coast.
PSA, the world’s biggest container port operator, quoted a rate of Rs1,748 for handling a loaded container to emerge the lowest bidder for the operation and maintenance (O&M) contract to handle containers from five berths at Netaji Subhas Dock of Kolkata port.
PSA International is fully owned by Temasek Holdings Pte Ltd, the sovereign wealth fund of Singapore.
India’s tariff regulator for ports owned by the Union government had permitted Kolkata port to charge Rs4,082 from customers for handling a loaded container. Out of this rate, Kolkata port was willing to share up to Rs2,030 per loaded container to the private firm that would run the O&M contract. The private firm quoting the lowest rate for handling a loaded container within the ceiling rate of Rs2,030 set by the port would win the 10-year deal, according to the tender terms.
Of the amount collected from customers, Kolkata port will retain Rs2,334 per loaded container, that being the difference between the Rs4,082 allowed by the regulator and the Rs1,748 to be paid to PSA.
PSA Bharat Investments Pte Ltd, a wholly owned unit of PSA International, had placed price bids for the project apart from two other firms. United Liner Agencies of India (Pvt.) Ltd quoted a rate of Rs1,898 for handling a loaded container. The price bid of the other firm, Bollore Africa Logistics, was not opened by the port for reasons it didn’t disclose.
“The price bid submitted by PSA was approved by the board of trustees of Kolkata port on Monday,” said I. Jeyakumar, deputy chairman of Kolkata port trust. “The port trust issued a letter of award to PSA on Monday, which was accepted by the firm”, he said.
PSA could not be reached for comment immediately.
Of the five berths at Kolkata port, three will be mechanized. Loading and unloading of containers at the other two berths will be carried out with the help of a ship’s gear, Jeyakumar said.
PSA will have to erect 12 new cranes and deploy 30 tractor trailers for the 10-year contract beginning 1 December.
ABG Kolkata Container Terminal Pvt. Ltd, a joint venture between ABG Infralogistics Ltd and PSA, already handles containers from two berths at Kolkata port. ABG owns a 51% stake in the terminal with PSA holding the balance.
The 10-year contract for the existing two berths will end in November.
ABG Kolkata Container Terminal currently charges about Rs1,200 for a loaded container.
In the year to March 2013, the Kolkata dock of the port handled 463,000 standard containers. The port runs two docks, at Kolkata and at Haldia. Between April and January this fiscal year, the dock at Kolkata handled 380,000 standard containers, according to the Indian Ports Association, a body representing the ports owned by the Union government.
Kolkata port is a gateway to eastern and north eastern India besides two land-locked countries of Nepal and Bhutan.
PSA was one of the first to enter India when the country opened its ports to private investments in the late 1990s. The firm has a 62.5% stake in a container terminal at V O Chidambaranar port in Tuticorin and runs another terminal that it owns fully at Chennai port, both in Tamil Nadu. These two facilities can load a combined 1.65 million standard containers a year.