PSA signs Rs 8,000-cr JNPT contract for 4th container terminal

The Rs 8,000-cr project is being funded through 100% FDI and is the fourth project by Port of Singapore Authority in India

The Jawaharlal Nehru Port Trust (JNPT) at Navi Mumbai and the Port of Singapore Authority (PSA) on Tuesday signed a concession agreement for the Port’s fourth container terminal.

While a formal statement was not issued because of the model code of conduct, a senior government official confirmed the signing and said financial closure would be within the next 80 days. The agreement was signed in the presence of PSA’s group chief executive officer, TanChong Meng, and shipping secretary Vishwapati Trivedi.

The Rs 8,000-crore project is being funded through 100 per cent foreign direct investment and is the fourth project by PSA in India. It operates container terminals in Kolkata, Tuticorin and Chennai ports, with a total capacity of two million twenty-foot equivalent units (TEUs). The fourth container terminal would have a capacity of 4.8 million TEUs.

The Adani Group was the only other company to have bid for the project, at 27 per cent revenue share. Others backed off for reasons that included the inadvertent rush by the government to award the project and lack of clarity on details of implementation. PSA made a winning bid of 35.7 per cent royalty share. The project was awarded in February, shortly before the code of conduct came into play on March 5.

PSA had earlier won the project in partnership with ABG Ports but later backed out.

Rival companies have often criticised JNPT’s decision to award the project to PSA in spite of such an incident. However, refuting such charges, the senior official said, "PSA could not be awarded the project because of the conditions laid out by the port and change in its own stance about allowing ABG to continue its partnership with PSA."