Posted on December 2, 2024
MUMBAI: Jawaharlal Nehru Port Authority (JNPA) has drawn up qualification criteria for entities looking to bid for dredging, offshore reclamation and shore protection works estimated worth Rs 20,647 crore for the planned Vadhvan Port, seeking to quicken the pace of implementation following a thumping win by the BJP-led alliance in the recently held polls in Maharashtra.
The threshold technical capability for bidders has been set at Rs 15,113.60 crore, comprising experience in constructing eligible projects in two categories in the last ten years. The two categories are Public-Private-Partnership (PPP) experience in port and core sectors and construction experience in port and core sectors, according to sources.
The port sector includes ports, port terminals/berth, jetty and other analogous infrastructure, capital dredging works, maintenance dredging works, offshore reclamation works, breakwaters, material inland waterway terminals, approach trestles, marine bridges, any other offshore structures relating ports etc.
The core sector covers civil construction cost of highways, power sector, commercial setups (SEZ’s etc.), telecom, airports, railways, metro rail, industrial parks/ estates, logistic parks, pipelines, irrigation, water supply, stadium, hospitals, hotel, smart city, warehouses/ Silos, oil and gas, sewerage and real estate developments. It will also include projects with the title of RIDF, PMGSY road, link road, city roads, rural road sector/ municipality road, real estate projects which demonstrate road development/construction of bridges or culverts.
At least one fourth of the threshold technical capability should be from eligible projects in PPP experience in port sector and/or construction experience in core sector categories.
Projects to be considered include payments/receipts of more than 5 per cent of the Phase-I estimated project cost in case of construction experience.
In the case of PPP experience, the capital cost of the project should be more than 5 per cent of the Phase-I estimated project cost.
A bidder should have a minimum net worth (financial capacity) of Rs 2,267.04 crore (which is 15 per cent of the technical threshold capacity for which bids are being invited) at the close of the preceding financial year, sources said.
In the case of a consortium, the combined technical capability and net worth of those members, who have and shall continue to have an equity share of at least 26 per cent each in the special purpose vehicle (SPV) would be considered for eligibility.
This is subject to the condition that each such member shall, for a period of six months from the date of commercial operation of the project, hold equity share capital of not less than 26 per cent of the subscribed and paid-up equity of the SPV and 5 per cent of the total project cost specified in the concession agreement.
Further, each member of the consortium shall have a minimum net worth of 7.5 per cent of Phase-1 estimated project cost in the immediately preceding financial year.
In the case of joint venture/consortium, the calculation methodology of technical capacity and financial capacity will assess the financial strength, or the experience score only of those who contribute a minimum 26 per cent share to the consortium.
A bidder should have A- (A minus) and above credit rating given by credit rating agencies authorised by the Securities and Exchange Board of India (SEBI).
If the bidder does not have A- and above credit rating, it will have to submit a comfort letter from its bankers/financial institutions along with its bid that they will provide credit facilities (term loan) to the bidder to meet the project cost excluding grant, if any.
The OECD country weightage has been pegged at 50 per cent.
On November 14, the board of Jawaharlal Nehru Port Authority cleared a proposal to undertake dredging, offshore reclamation and shore protection work for VadhvanPort in two phases on the Hybrid Annuity Model (HAM).
According to the proposal, the first phase of the work will involve reclamation of some 800 hectares of land in offshore of Vadhvan Coast to build the new port for which the contractor will be paid 60 per cent of the contract value during the construction period of three years.
In the second phase, the balance reclamation work of some 400 hectares will be carried out in two years during which the contractor will be paid 60 per cent of the contract value.
The balance 40 per cent of the contract value for both the phases will be paid to the contractor during a ten-year maintenance period which will start after the two phases of offshore reclamation, dredging and shore protection works are completed in five years, sources said.
Maintenance dredging will be excluded from the maintenance period.
The proposal has been submitted to the Ministry of Ports, Shipping and Waterways for onward submission to the Public Private Partnership Appraisal Committee for approval, ahead of calling bids from developers.
The PPP HAM model is being tried out for dredging, offshore reclamation and shore protection works in an Indian port project for the first time: typically, such works are carried out through the traditional engineering, procurement and construction (EPC) mode, wherein the contractor is paid in stages during the contract period, the final bill is settled upon completion of the work and the contractor exits.
The PPP HAM model is seen as a “deferred EPC” method of undertaking the work. Instead of paying the full amount to the contractor in three years under the EPC mode, J N Port Authority will have to disburse 60 per cent of the amount during the five-year construction period spread over two phases and the balance 40 per cent during the ten-year maintenance period.
This structure will significantly reduce the borrowing needs of JNPA to undertake the Rs 76,220 crore project, billed India’s biggest public port with a capacity to handle 298 million tonnes (mt) of cargo a year.
The new port will be constructed by Vadhvan Port Project Ltd, a joint venture between state-owned Jawaharlal Nehru Port Authority (74 per cent stake) and Maharashtra Maritime Board (26 per cent equity), in two phases under the landlord model.
