Mumbai's Nehru Port ends hope of rekindling Singapore 4th terminal deal

SINGAPORE's PSA International refused to sign the final concession agreement with the Jawaharlal Nehru Port Authority (Nhava Sheva) near Mumbai in the specified time period, thus inducing the government to cancel the deal to build a fourth container terminal.

PSA and its local partner, ABG Ports, won the US$1.5 billion bid a year ago after offering a 50.8 per cent share of revenue as annual royalty to the landlord port as a step towards privatisation.

The government had hoped to sign a contract in January with the first phase being operational in three years offering a 2.4 million TEU annual capacity.

Said a port official: "The board has decided to terminate the letter of intent issued to the PSA-led consortium and also forfeit the bidder's bond amount [US$12.5 million]. The port will call for new bids for the project."

The unwillingness to sign was said to be rooted in fears over financial viability given its high cost and the slowdown in world container shipping. The authority planned to develop the project in two phases on a 30-year build-operate-transfer basis, with a 4.8 million TEU annual capacity at full build-out.

The Nehru port has three terminals: DP World's Nhava Sheva International Container Terminal; Gateway Terminals operated by APM Terminals; and port-run Jawaharlal Nehru Container Terminal, which cumulatively handled a record 4.32 million TEU in fiscal year ending March 31.