ABG Kandla Container Terminal Limited

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On June 23, 2006, ABG Kandla Container Terminal Limited (ABGKCTL) entered into a 30 year concession agreement with Kandla Port Trust (KPT) for the development of existing berth numbers 11 and 12 at Kandla port as container terminal. The concession agreement required ABGKCTL to invest and commission container handling facilities in the two berths as well as operate and manage the new container terminal. ABGKCTL was projected to have a throughput of 450,000 TEUs in the fifth year of operation. This concession was the result of Government of India’s (GOI) commitment to encourage private investments to augment and upgrade the country’s port capacity. To this effect, GOI took several policy initiatives. Of these, the guidelines issued in October 1996 was the most comprehensive, facilitating private sector participation in the construction and operation of additional assets such as container terminals and cargo berths. ABGKCTL was a subsidiary of India’s ABG Group. ABG Group won the international competitive tender conducted by KPT by bidding the highest (48.997%) revenue share from operations. ABG seemed to have partnered with Voltri Terminals, which runs a box facility at Genoa at Italy, to meet the minimum experience criteria for participating in the international tender. However, there was no information available on Voltri’s stake in ABGKCTL. Afcons and Gammon India were the other two bidders for the project. The Afcons-Hamburg Port Authority combine had quoted 33.399 per cent while Gammon India-Mercy Docks and Harbour had offered to part with 16.974 per cent of their annual revenues. The total cost of the project was estimated to be US$ 45.5 million. There was no information available on the financial closure of this project. Kandla port was designated as a major port in India. All major ports in India are administered by the central government while the minor ports are administered by the respective state maritime boards under the Indian Ports Act 1908. In terms of tariff setting, the major ports came under the Tariff Authority for Major Ports while the minor ports had the freedom to fix their own tariff. ABGKCTL took over the operation of berth number 11 and 12 at Kandla port in early 2007. None None