Singapore’s Port Operator PSA Gets Three-year Ban From Taking Part In Indian Port Tenders

PSA International Pte Ltd, a unit of Temasek Holdings Pte Ltd, the sovereign wealth fund of Singapore, will no longer be eligible to take part in tenders that are floated by the major Indian, state-owned ports for at least three years.

Such a notice came through after the authorities of the V O Chidambaranar Port passed on an order of termination on its terminal unit functional at the Southern port, highlighting defaults in the payment of royalty dues.

JNPA sources have mentioned that PSA is not going to be barred from the tendering process, wherein it is a pre-qualified bidder as the termination order has come after the bid due date, meaning that the event that triggers the ban had taken place after some of the bidding groups, like PSA, were qualified technically to move ahead to the next phase of the auction.

By taking such a stand, the JNPA seeks to distinguish a qualification criterion based on the timing of the event -after or before and one that attracts disqualifications.

Singapore Port
Image for representation purpose only

Some port experts do not observe merit in the stand of JNPA by highlighting the fact that the process for tender is still left to be concluded since price offerings have not been called from the already shortlisted bidders.

PSA’s participation in the JNPA tender when it has been mandated contractually to build another berth length of one km by 2024 at the port near Mumbai has surprised the industry.

PSA’s wholly owned Bharat Mumbai Container Terminals Pvt Ltd (BMCT) that operates the terminal at JNPA has initiated work for the second phase to add 2.4 million twenty-foot equivalent units – TEUs. Once the second-phase expansion is over, BMCT will be able to handle about 4.8 million TEUs per year.

PSA-Sical Terminals has royalty dues worth Rs1, 027 crores to the VOCPA, and a default that has compelled the port authorities to serve a termination order on 8 June after several legal petitions brought by the Singapore entity had failed.

References: India Shipping News, Economic Times

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