The joint venture between J M Baxi Ports & logistics Limited and a consortium of Indian Potash Limited (IPL) is set to acquire the rights to mechanise and manage a multi-purpose cargo berth at state-owned Visakhapatnam Port by evolving as the highest bidder for the 30-year contract. The highest royalty offered for the project was Rs 55.44 per tonne by J M Baxi Ports & Logistics group-Indian group when the price bids were opened on Saturday.
Indian Potash Limited is India’s biggest fertiliser importer and 2nd most significant buyer of fertilisers in the global market. It has more than 70% owned by fertiliser co-operatives. The only company in India that handles fertilisers all year long at all ports is Indian Potash, which imports fertilisers through all of India’s ports. Port officials said the partnership between J M Baxi Group and Indian Potash would create a long-term sustainable collaboration for handling fertiliser at Visakhapatnam Port.
The highest royalty offered for the project by J M Baxi Ports & Logistics group-Indian Potash group
Port tenders at major ports (owned by the centres) decision are based on royalty per ton – the entity willing to share the highest royalty per tonne of cargo handled at the berth with the port authority for 30 years.
The royalty payable will increase annually in tandem with the increase in WPI (Whole Price Index), a measure of costs. Under the new Major Port Authorities Act and the MCA (model concession agreement), the terminal operator will be able to choose market pricing. This will be the fourth contract win for Mumbai-based J M Baxi Port & Logistics at a State-owned major port in recent times. This is India’s 3rd most valued logistics company, secured contracts last year to manage container terminals at J N (Jawaharlal Nehru) Port and V O Chidambaranar Port formerly known as Tuticorin Port and the shallow water/coastal berths at Jawaharlal Nehru Port.
Indian Potash Limited is India’s biggest fertiliser importer and 2nd most significant buyer of fertilisers in the global market
The contract at Visakhapatnam Port comprises mechanising the eastern coast port’s EQ7 (East Quay berth 7) for handling cargo including fertilisers with private funds worth Rs 201 crores. The EQ7 berth will be able to move 3.61 million tonnes (mt) of freight annually once it is automated.
The project is part of the NMP (National Monetise Pipeline) of government wherein operational infrastructure assets including port terminals will be privatised through the PPP (Public-Private-Partnership) route. At the port of Visakhapatnam, J M Baxi Ports & Logistics operates a container terminal with a 1.5 million TEU capacity.