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Delay in container terminal extension work irks VPT

Monday, 04 June 2018 | 00:00

The Visakhapatnam Port Trust has served an ultimatum on the Visakha Container Terminal Private Limited (VCTPL) for its failure to launch work on extension of the container handling facility even though the concession agreement was signed on December 17, 2014.

VCTPL, joint venture of United Liner Agency (a part of J.M. Baxi Group) and Dubai Port World International, started its operations in 2003 as a BOT operator of Visakhapatnam Port.

The terminal has a depth of 16.5m, quay length of 450m and channel width of 220m becoming one of the finest container terminals in the country.

Highly placed sources told The Hindu that VPT had given time till September to start the work on extension of the container terminal. The final deadline set for VCTPL is June 30.

The sources said the issue would figure at the next meeting of the board of trustees.

Re-bidding

The board will also explore re-bidding. However, if concession agreement is cancelled and fresh bids are invited, the project proponents will have the risk of getting blacklisted.

The project cost of the capacity augmentation project, which was originally estimated at ₹633.11 crore, was calculated to have gone up to ₹820 crore in 2017. Sources in VCTPL point out lack of connectivity road to the project site as one of the reasons for delay in commencement of the extension of the terminal. The present terminal has a capacity to handle 0.7 million twenty-foot equivalent units (TEU). It will go up by 0.54 million TEU once the capacity augmentation is completed. VCTPL is also yet to achieve financial closure.

VCTPL during 2017-18 handled a throughput of 3.66 lakh TEU accounting for 6% growth.

Earlier, it had achieved 10 to 15%. After global bidding, VCTPL which had the facility for right of first refusal became the sole bidder. It increased the gross revenue share to the landlord port from initial offer of 2% to 11.04% after lot of persuasion.

VCTPL, sources in the industry, say with a large hinterland and its container facility available at Haldia and Paradip (at advance stage of construction), has the distinctive advantage of transhipping cargo from there to Colombo via Visakhapatnam with the Centre issuing orders for relaxation of Cabotage law.
Source: The Hindu

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