SC allows AP Moller-Maersk to bid for 4th container at JNPT

The Supreme Court has directed the government to allow Danish-based AP Moller-Maersk Group (APM Terminals) to bid for the fourth container terminal at the Jawaharlal Nehru Port Trust (JNPT), the country?s busiest port.

The court had tagged another case of PSA Sical Terminals' bid for the eighth berth container terminal at Tuticorin Port with that of AP Moller-Maersk Group's case.

It, however, upheld a decision to exclude the bids of PSA Sical Terminals.

AP Moller-Maersk Group's case, the apex court said, "The authorities of the JNPT shall allow APM Terminals to continue to participate in the tender process for the fourth Container Terminal and the decision to the contrary conveyed to it on June 29, 2009, is quashed."

The company has challenged the government policy of not allowing existing operators to bid for the immediate next terminals.

The government has mandated that the existing terminal operators can bid only for alternate terminals to ensure that private facilities were available to all users on equal basis.

A bench of justices Altamas Kabir and Cyriac Joseph held that the government has the right to make a policy to prevent companies from bidding for the immediate next terminals so that no monopoly of cargo firm is created.

"The Central government was within its powers to adopt a policy to prevent the port facilities from being concentrated in the hands of one private group or consortium which could have complete control over the use of the facilities of the ports to the detriment of the shipping industry as a whole," the bench said.

It observed that since APM Terminals has not participated in the bid for the third terminal at JNPT, it should be allowed to bid for the next terminal.

"If the tender process for the third container terminal had been concluded, the various complications could have been avoided since under the revised policy, the appellant was entitled to participate in the alternate bids," it said.

The bench set aside the orders passed by the Bombay High Court which had dismissed the plea of the APM Terminals.

In the PSA Sical's case, the court observed that since it has already participated in the last bid, it should not be allowed for the next bid.

"The decision taken by Tuticorin Port Trust Authorities to exclude PSA Sical from bidding for the 8th Berth Container Terminal cannot, therefore, be said to be arbitrary or unreasonable so as to warrant interference," the apex court said.

"In fact, the position of PSA Sical is no different from that of APM Terminals which had been excluded from the bid for the Third Container Terminal at JNPT," the bench said.

PSA Sical Terminals is a joint venture between Singapore based PSA Corporation and Sical Logistics.