Plans to build a Rs. 5,992 crore container terminal at the government-owned Kandla Port, Bangalore, have been scrapped after the two interested parties backed out without even making a bid.
Both Adani Ports and Special Economic Zone Ltd (APSEZ), and a consortium consisting of Hyundai Engineering and Construction Co, and Concast Infratech Ltd, had initially shown interest in the new facility, but talks soon collapsed over viability concerns.
According to the tender, the project would involve the construction of six berths with a 4.2 million TEU capacity at Tuna-Tekra, in the Gulf of Kutch.
However, according to the Kandla Port Trust (KPT), the tender was scrapped last week.
It is believed that the two bidders sought more flexibility in the build, asking to complete the project in phases. However, the tender terms would not allow any leeway in the project, demanding that the terminal be built to appropriate size irrespective of cargo demand.
Fears of over-capacity were enough to remove any possible success.
Containers have not been handled at the port for nearly a year since the previous privately-owned terminal closed over disputes with the trust.
Even so, at its peak the facility handled 167,000 TEU annually, compared to the 600,000 TEU holding capacity available.
This is the second container terminal tender to collapse at one of the union government owned ports in recent years.
Last year, Chennai port trust released a tender to build an Rs.3,686 crore container terminal with a 4 million TEU capacity.
These plans were again short-lived as none of the seven short-listed bidding groups made concrete offers for the project.
Such a lack of response may be down to the re-developed guidelines for market-linked tariff-setting at ports owned by the government, put in place July of last year.
The new law grants freedom to cargo holders to raise base rates every year dependant on market conditions, subject to a 15 percent cap.
Previously, cargo handlers would have to seek approval for any rate increases.
Both Kandla and Chennai are expected to restructure the projects prior to calling for fresh bids.