When PSA sues, India scraps Tuticorin box shop auction

INDIA's shipping ministry has scrapped an auction for a second container terminal at Tuticorin port in southern Tamil Nadu state after Singapore's PSA International, which was excluded from the bidding, challenged the decision in high court.

A government lawyer informed the court that the tendering process has been scrapped and the port authority would opt for a fresh tender after reassessing the need for a new terminal.

The state-owned port had received bids from two consortia led by India's Chettinadu Logistics and Britain's Oceanic Transport to develop the INR312.23 billion (US$6.4 billion) terminal with annual handling capacity of 600,000 TEU.

PSA International was among five companies short-listed as technically and financially qualified to bid for the facility.

It had bid along with local partner Sical Logistics, with whom it is operates another terminal at Tuticorin, which is operating at full capacity of 450,000 TEU.

But after short-listing the PSA-Sical consortium for the contract, the port authority excluded it from submitting a price bid.

It cited a government policy that bars a company that operates a terminal at a state-owned port from participating in the bid for the next contract, to prevent monopoly and promote competition within a port.

The new terminal is among several planned by the central government to raise the handling capacity at its 12 main ports to more than one billion tonnes by 2012 from 567 million tonnes to overcome capacity constraints.

The additional capacity will require an investment of INR554 billion, of which INR369 billion will come from the private sector.

(Source: www.schednet.com)