ABG-Kolkata Port tussle headed for arbitration

ABG close to winning bid for container-handling berth at Haldia

The Kolkata Port Trust (KoPT) and Haldia Bulk Terminal (HBT) tussle is heading for arbitration. KoPT is in the process of assessing the cost of damage caused due to the exit of ABG Haldia Bulk Terminal, a senior official told Business Standard.

In November, the port authorities had encashed the bank guarantee of Rs 4 crore provided by ABG at the time of signing the contract. Earlier, they had disallowed ABG and its partner Louis Dreyfus to remove equipment worth Rs 140 crore, including six cranes, 50 dumpers, 26 loaders and waybridges out of Haldia.

Accusing the company of abandoning the project, KoPT has taken the stand that the contract has not been terminated and still stands. “We want the company to start the project. Instead, they retrenched their workers and decided to stop work,” said a senior port official. He added that although the company has given a termination notice, ABG’s petition to be allowed to resume work at Haldia is pending in the High Court.

UNFINISHED BUSINESS

• ABG and Louis Dreyfus Armateurs wanted to evacuate their equipment from Haldia port, after giving termination notice on October 31 
• Louis Dreyfus, on November 15, sought French government help to intervene and facilitate a safe exit 
• Kolkata Port Trust did not allow the company to take equipment, since contract had not been terminated by it 
• In early November, the port encashed a Rs 4-crore bank guarantee given by the company 
• Port authorities decided to seek compensation from the company for abandoning work 
• Damage cost assessment by Kolkata Port underway

HBT, a joint venture between home-grown ABG Infralogistics and French Louis Dreyfus Armateurs, had pulled out of a 10-year contract for cargo handling operations at berth number 2 and 8 of the Haldia Dock Complex (HDC) blaming political climate and “vested interests” by the authorities on October 28.

French major Louis Dreyfus Armateurs (LDA) has now approached the French government and also the country’s trade and commerce department to facilitate safe passage of its equipment.

While the tussle over Haldia is expected to get prolonged, ABG is close to winning the bid for a container handling berth at Kolkata Port, leaving the officials miffed. “If ABG had a problem with the port authorities, then why is it keen to bid for another project at the same port?” the official asked. According to sources, ABG-LDA has emerged as the lowest bidder for container handling at berth number 5 of Netaji Subhas Dock, under the Kolkata Dock System.

The problem at Haldia started early September when HBT, citing unviability, planned to suspend its operations and after a court intervention had to enter into a deal with KoPT, which ensured them more cargo. After this, HBT retrenched about 275 workers, which led to violent protests. HBT decided to pull out of the contract, alleging abduction of three of its officials including the family of one employee on October 28.

A three-member fact-finding team set up by the Union shipping ministry visited the Kolkata Port recently; it is expected to file its report soon. Among other things, it will pin down the problem areas to avoid such incidents in future.