JSW Infrastructure Ltd. is set to secure the development rights for a new port at Murbe in Maharashtra?s Palghar district, with an estimated investment of approximately Rs 42.59 billion. This follows the failure of a global tender process, known as the Swiss Challenge method, initiated by the Maharashtra Maritime Board (MMB) to attract competitive bids.
According to an official from the MMB, "The Swiss Challenge tender did not attract any competing offers." Consequently, JSW Infrastructure, led by Sajjan Jindal, India?s second largest private port operator, had submitted a suo moto proposal to construct the new port, located about 40 kilometers from the Union government's on-going Vadhavan port project in the same district.
Under the Swiss Challenge mechanism, the original proposer (JSW Infrastructure) is given the opportunity to match the highest bid discovered through an open auction. If they decline, the deal is awarded to the highest bidder. "The proposal from JSW Infrastructure will now undergo scrutiny and be forwarded to the government for final approval before being formally awarded," explained the MMB official.
The proposed Murbe port will operate on a Public-Private Partnership (PPP) model, specifically Design, Build, Own, Operate, Transfer (DBOOT). The tender stipulated that the preferred bidder would be selected based on their minimum assured annual income offer to the MMB.
Notably, the commercial terms of JSW Infrastructure's original proposal will be compared with those of the preferred bidder identified through the failed tender process. Should JSW Infrastructure's terms not match those of the preferred bidder, they will have a thirty-day window to revise their offer.
Despite its strategic location, connected to NH-8 via the 4-lane state highway (Boisar Road), and proximity to major industrial areas like MIDC, Tarapur Industrial Area in Maharashtra, and Vapi and Valsad Industrial Area in Gujarat, potential bidders were deterred by the Swiss Challenge terms favoring JSW Infrastructure.
Sources within the Maharashtra government indicated that JSW Infrastructure opted for Murbe after encountering local opposition to its planned Nandgaon-Alewadi facility in Thane district. Concerns have arisen within the port industry about the viability of multiple new ports in close proximity, particularly with the recent clearance for the Vadhavan port project by the Union Cabinet.
JSW Infrastructure's interest in Murbe aligns with its strategy to meet the growing needs of the JSW Group. However, industry insiders suggest that leveraging opportunities at Vadhavan port for expansion, particularly through upcoming cargo handling contracts on a PPP basis, might have been a more strategic move than pursuing another greenfield port project at Murbe, which is anticipated to face community resistance.
Murbe represents JSW Infrastructure's second recent greenfield port project, following the award of rights to develop and operate a port at Bhavikeri Keni village in Karnataka?s Uttara Kannada district, involving an investment of Rs 41.18billion. This port project includes a royalty structure of Rs 17.25 per metric ton of cargo handled, with an annual 2% increment, as per Karnataka?s Minor Port Land Allotment Policy. (Source: ET)
