JNPT set to get PIB nod for widening of Mumbai harbour channel

The Public Investment Board (PIB) is set to approve the project Jawaharlal Nehru Port Trust (JNPT) project for deepening and widening of the Mumbai harbour channel and JN port channel (Phase-II) with a revised estimated cost of Rs 1546.30 crore.

A senior finance ministry official told Business Standard that JNPT had submitted the revised plan which was expected to be cleared by the PIB, headed by the expenditure secretary, this week.

He added that the fresh cost estimate had been worked out at Rs 1546.30 crore instead of Rs 1347 crore at the time to pre-PIB basing on estimated cost in December 2010. Any project beyond Rs 500 crore requires a mandatory PIB clearance.

JNPT currently has a draft of 11 meters and the biggest ship it can receive is partially laden 6,000 twenty equivalent units vessels. With the deepening of the draft to 14 meters it will be able to receive fully laden 6,000 Twenty-foot equivalent units (TEUs) vessels and up to 8,000 TEUs partially laden ships.

“We would like to increase the draft to 17 meters so we are ready to receive 15-17,000 TEU vessels when they come to our shore. It will save the freight costs for importers and exporters since much of the cargo is transshipped to JNPT from Colombo and Singapore,” said L Radhakrishnan, chairman, JNPT.

The pre-PIB meeting was held on July 1 under additional secretary and financial advisor, ministry of shipping.

The three new items behind the cost escalation includes, fuel escalation (about Rs 44.10 crore), levy of customs duty on import of dredges (Rs 55.99 crore) and likely assured depth premium (Rs 68.967 crore).

With the increase in basic dredging cost, the IDC at the rate of 8 per cent per annum has also increased from the pre-PIB estimate of Rs 59.11 crore to Rs 92.60 crore.

The shipping ministry has asked for comments on the appraisal and fresh estimates from department of economic affairs, ministry of statistics and programme implementation, ministry of environment and forest and planning commission.

Under the project, JNPT has decided to dredge the Mumbai harbour channel and J N port channel for accommodating vessels with a draught up to 14 m of 6000 TEU capacity using tidal window and up to 12 m draught vessels at all states of tide as per the detailed project report (DPR) proposed by Hasko Wing India Private Limited in 2003.

At present, vessels up to 9.5 m and up to 12.5 m is being handled by using tidal window. The DPR has been revised further by Project Consultant Management (PMC) Tata Consulting Engineers Limited in December 2010.

As per the dimensions, length of the channel is to be increased from 29 km to 33.54 km and width from existing minimum 325 m to 370 m for straight reach and maintained 450 m at the banks of the channel as it exists. The width of the entrance of the Mumbai Harbour channel is to be 800 m.

Government approved the overall estimate of Rs 800 crore for the project in September 2005. In response to the global tender, the lowest offer was 20 per cent over the estimated cost. JNPT, therefore, submitted a revised cost estimate of Rs 1055 crore. The lowest bidder didn’t extend the validity of the bid beyond June 2, 2008.

The government decided to then go for a more scientific design and revised the estimate after Tata Consultancy report on the project. The estimate cost subsequently has gone up to 1347 crore at the time of pre-PIB and Rs 1546.30 crore now.The earlier estimate was very low and not done properly, Radhakrishnan said. “We have gone for international standards in the new design following the Permanent International Association of Navigation Congresses (PIANC) guidelines which has increased the cost," he added.

MoEF granted the environment clearance for the project in March 2004. Due to the delay in project, the ministry gave extension of the environment clearance for the project by another 5 years from March 18, 2009.