Bharat Mumbai Container Terminals Private Limited

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On 26 February 2014, the Jawaharlal Nehru Port Trust (JNPT) awarded a 30 year concession (including a construction period) with PSA International Pte Ltd (Singapore) for development of the fourth container terminal at JNPT which would add a further 4.8 million twenty-foot equivalent units (TEU) and a berth of 2000m in length to the existing 4 million TEU capacity in Raigarh district, Navi Mumbai, India. The project would be developed in 2-phases (each with 1000m of quay and approach bridges, and 2.4mn TEUs, 12 quay cranes) with capacity of about 30mmtpa in each phase. Under the concession, PSA was responsible for design, finance, construction,operation, maintenance and marketing of the berth. JNPT Port would provide supporting facilities like dredging of channel and berth,and back-up area.Upon completion of this project it would handle container traffic to be tune of 10m TEUs by the year 2018-19. The major components of the development of the berth included construction of a 2000-m long berth to acommodate large super post-Panamax vessels; Cranes and conveyor system; Front End Loaders. The berths would have a depth of 16.5 metres. It would also be equipped with the latest technology and equipment to offer customers fast turnaround of their vessels. BMCT was well-connected by major highways and rail networks to key markets in Maharashtra, Gujarat, and the National Capital Region of India. PSA International Pte Ltd established Bharat Mumbai Container Terminals Private Limited (BMCTPL),a Special Purpose Vehicle (SPV), to implement the project.The SPV won the tender through an international competitive bidding by quoting the highest revenue share to the Chidambaranar Port Trust of 35.79% during the concession period of 30 years. 3 bidders had been short-listed, including the Reliance-Anil Dhirubhai Ambani Group (RADAG), PSA International and CMA CGM (France). This was the second attempt at auctioning the project. A consortium of PSA and local firm ABG Ports Ltd was awarded the project after it quoted a record high revenue share then of 50.828% in a public tender in 2011. But in October 2012, JNPT withdrew the letter of award given to the consortium after the group failed to sign a concession agreement a year after it was awarded the project (26 September 2011), since they failed to finance the project. The consortium had offered a very optimistic bid. On 3rd June 2013 JNPT Trust announced a new tender for the construction and operation of the 4th terminal of the port. Since the project was located at a classified "Major Port" (JNPT Port), it was subject to tariffs regulated by the Tariff Authority of Major Ports (TAMP). This project would be the first to utilize the new guideline for tariff-setting at ports owned by the Union Government that was announced in July 2013. The new rules granted flexibility to cargo handlers to raise rates every year based on market conditions subject to a cap of 15% if they comply with certain performance standards. In the earlier rule, cargo handlers had to seek approval for rate increases from the TAMP (regulator) once in three years. BMCTPL was permitted to recover tariff from the users of the project facilities and services as well as collect all cesses and charges from the users of the project facilities and services, as may be directed by JNPT. The concession was signed on 6th May 2014.The project (Phase-I) attained financial closure on 13th October 2014 with a debt equity ratio of 65:35. The estimated capital cost of the project was US$ 765.1mn. Financing comprised a US$ 497.3mn (SG$ 630mn @1.266 SGD/USD) 7-year term loan, and US$ 267.8mn sponsor Equity. DBS (Singapore) was was the provider of SGD loan. Construction on the project was expected to begin in May 2014 (the Appointed Date for the Concession) and start commercial operation by January 2018.