Govt authorises ports to award contracts without its prior nod

The Centre has empowered port authorities to award contracts without prior approval of the shipping ministry to selected bidders under the public-private partnership (PPP) mode to expedite projects worth Rs 23,000 crore.

The ministry has written to all port trusts authorising them to sign concession agreements for the PPP projects. They can take such decisions at their board level. However, the ministry must be informed of all the works awarded.

“Ports have been sending proposals to the ministry before signing the Concession Agreement with the selected bidders quoting the highest revenue share. It has been decided that, henceforth, the ports need not send the proposal for prior approval of the ministry before signing the Concession Agreement,” a shipping ministry communique to all the ports said.

The move comes at the a time when five major PPP port projects worth more than Rs 2,700 crore are to be awarded in the next few weeks. The process for awarding another 23 projects worth more than Rs 20,000 crore has to be completed by December 2009.

The government has set a target of taking the overall capacity of 12 major ports to 1,016 MT by 2012 from the present 555 MT.

The ministry letter said the ports would need to send the PPP Appraisal Committee (PPPAC) Memo to the ministry and the approval of Cabinet Committee on Economic Affairs would need to be taken for all PPP projects.

It also said that in case standard bid documents are used in respect of PPP projects, Ports need not wait for the PPPAC approval before issuing Request for Proposal to the bidder.

Cabinet Secretary K M Chandrasekhar had instructed the Shipping Ministry soon after the formation of the new government to award six major projects by June 30, 2009 and give out 23 others by December end.

Out of the six projects, the concession agreement for constructing a deep-draught iron ore berth costing Rs 591 crore at Paradip Port has already been signed.