Tackling a last-minute change incorporated by the Cabinet in June while approving the Vadhavan port project swiftly, state-run Jawaharlal Nehru Port Authority (JNPA) will float an expression of interest (EoI) on Tuesday to pick a private partner for development and maintenance of dredging, offshore reclamation and shore protection works on public-private-partnership (PPP) under Hybrid Annuity Model (HAM) estimated worth Rs20,647 crores for the new port, government sources said.
The basic infrastructure for the new deep draft port such as dredging, reclamation, shore protection works, breakwater, approach trestle, rail and road connectivity, land acquisition and other common utilities, entails an investment of Rs38,976 crores.
The original plan was to undertake all the core infrastructure works on the engineering, procurement and construction (EPC) route funded by Jawaharlal Nehru Port Authority (JNPA) and Maharashtra Maritime Board (MMB), the promoters of the new port. The rail and road connectivity will be developed by Indian Railways and the National Highways Authority of India, respectively.
The Public Investment Board (PIB) headed by T V Somanathan, Finance and Expenditure Secretary, Finance Ministry, cleared this plan on 16 February and recommended it to the Cabinet for approval.
On 19 June, the Cabinet, though, decided that the dredging and reclamation package, valued at Rs17,709 crores, will be carried out through a “suitably structured PPP model with appropriate risk sharing and financial support arrangement between VPPL (Vadhavan Port Project Ltd) and the concessionaire (for instance, hybrid annuity models, gap funding by VPPL)”.
The rest of the core infrastructure will be created through EPC mode.
Besides, the remaining project cost of Rs37,244 crore will be invested by the private operators of container terminals, multipurpose berths, coastal cargo berths, RO-RO and liquid berths selected by Vadhavan Port Project Ltd (VPPL). VPPL is a special purpose vehicle formed by state-owned Jawaharlal Nehru Port Authority and Maharashtra Maritime Board (MMB) to implement the new port.
As per the Cabinet approval, JNPA is now seeking “non-binding” expression of interest for assessing interest among parties in the market for developing the land parcel on Hybrid Annuity Model (HAM) ahead of floating a tender for the work.]
“The objective of the project is to carry out dredging, develop land parcel through reclamation for the development and maintenance of the developed facilities envisaged for the entire port development on Hybrid Annuity Model,” according to the EoI documents.
In the HAM model, the first 40 percent is paid as fixed amount in five equal instalments during the construction phase whereas the remaining 60 percent is paid as variable annuity amount towards balance bid amount along with interest on the residual debt after the completion of the project depending upon the value of assets created.
The scope of work includes carrying out dredging of approach channel, harbour basin, dredging of material for filling/ reclamation of total offshore area of 1,227 hectares and maintenance of the developed area on long term concession.
The successful developer will not be given the rights to collect revenue from the project and will not be eligible to levy and charge a user fee from users of the project, according to the EoI documents.
The revenue collection responsibility will vest with JNPA.
Government Organisations/ Banks/ Developer/ Companies/ financial institution or JV/ consortium of applicants etc registered in India and engaged in major port/ infrastructure projects in India or globally are eligible to participate.
The successful bidder will be responsible for financing, executing, maintaining and transferring the facility to JNPA after the concession period. JNPA will define minimum development obligations for the private sector yet leave adequate flexibility for the developer to build the project in response to market demand and hence optimize collective returns.
The bids will be evaluated on the basis of the Lowest Assessed Bid Price (summation of (a) Net Present Value (NPV) of bid project cost during the concession period and (b) NPV of O&M cost during the O&M period required by a bidder for implementing the project and shall be paid as per the provisions of the concession agreement.
The Assessed Bid Price shall constitute the sole criteria for evaluation of bids. The project will be awarded to the bidder quoting the lowest Assessed Bid Price. The discount rate for calculation of NPV will be the bank rate – the interest rate specified by the Reserve Bank of India + 1.25 percent shall be the applicable bank rate on the date of submission of bids.
(Source: ET Infra)
The post JNPA to float EoI for dredging and reclamation works for Vadhavan port on PPP HAM model appeared first on India Seatrade News.