Top terminal operators worldwide are lining up to win the bid for tender issued by Jawaharlal Nehru Port Trust (JNPT) on 31 August to privatise the Jawaharlal Nehru Port Container Terminal (JNPCT) at the Nhava Sheva port in Mumbai.
The top contenders include Terminal Investment Ltd (TIL), Abu Dhabi Terminals, APM Terminals Management B V, JSW Infrastructure Ltd, and DP World Ltd.
The tender, worth US$117 million, offers to privatise the only state-owned container terminal at the port under the public-private partnership model through the new law passed by the Indian parliament. The successful bidder wins a 30-year deal along with a free hand to set rates at the terminal based on market forces.
Among all the operators, the top three bidders eyeing to secure the tender most keenly are DP World, TIL backed by a silent partner, Adani Ports and Special Economic Zone Ltd (APSEZ) and APM terminals.
DP World, which already operates two of the five terminals at the port, namely NSICT and NSIGT, has the most at stake in the contest. If the operator wins the JNPCT tender, it could reap unprecedented profits by adding 680 meters to its berthing length as all three terminals are lined consecutively. This will also allow it to merge terminal yards.
On the other hand, if the UAE-based operator loses the deal there are high chances that it might abandon NSICT and NSIGT terminals after the expiry of current contracts in 2028, because of low container traffic at the terminals in case other contenders secure the contract.
This container volumes decrease is likely to happen because both the other major contenders are associated with top box lines. APM Terminals is associated with the shipping giant AP Moller Maersk whereas TIL is a unit of Mediterranean Shipping Company (MSC). If the latter wins the deal, terminals owned by DP World are set to lose traffic of 60,000TEU per month.
TIL is the strongest contender, supported by APSEZ, which also eyes contracts of NSIGT and NSICT terminal after 2028. The operator’s association with MSC not only ensures that it meets the minimum volume stipulations of the tender released by JNPT but secures container traffic at the terminal in the future.
Inadequate traffic at the JNPCT terminal in the future is becoming an increasing worry among the bidders. This is based on speculations of container volume shrinkage of up to 18,000TEU after one of the four liners availing service at the terminal shifts to the BMCTPL facility which will build an additional 1 km of berthing length.
On account of similar fears, APM Terminals, which already operates, along with CONCOR, JNPT’s GTI box terminal, is said to search for another shipping line as its partner to secure profits from the deal.
Only time can tell who will be the most successful bidder and if the winner will be able to secure enough profits over 30 years from the contract.
Ankur Kundu
Correspondent
