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Publish Date : 09-May-2014

PSA Singapore signed an agreement with Jawaharlal Nehru Port in Navi Mumbai to develop its fourth container terminal, entailing an investment of 8,000 crore.

The project includes developing a capacity to handle 4.8 Million twenty-foot-equivalent-unit (TEU) containers a year in two phases.

PSA has to present a bank guarantee of ?375 crore for the project. a Shipping Ministry source said, "It has already submitted ?75 crore and the remaining ?300 crore will have to be submitted in 80 days".

PSA earlier this year secured the project by offering to share 35.9 per cent of revenue. The contract permits PSA to design, finance, build, operate the terminal and collect revenues from port users for 30 years.

PSA at the end of 30 years has to transfer the project back to the Government.

This is the 2nd time PSA bid for the project. A few years ago, when container traffic in the country was seeing sharper growth, PSA had offered a much higher level of revenue share – 50.08 per cent – to develop and operate the terminal. It had subsequently backed out from signing the concession agreement.

The official said, "In the best case scenario, PSA has to start developing the additional two-million-tonne a year capacity in three-and-a-half years. In the worst case scenario, it has to develop the capacity in five-and-a-half years".

The trigger to begin the second phase of capacity expansion will start either after 2 years or within six months of the developer handling one million tonnes of throughput, whichever is earlier.

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