The Ministry of Shipping is making a fresh attempt to privatise the multi-modal cargo terminals at Varanasi, Haldia and Sahibganj on National Waterway 1, altering the deal structure from experience gained in a previous failed round.
The Inland Waterways Authority of India (IWAI) has sought bids to privatise multi-modal terminals at Varanasi in Uttar Pradesh and Haldia in West Bengal on equip, operate and transfer (EOT) basis.
Apart from this, a tender will be floated soon to privatise the Sahibganj terminal in Jharkhand on operate, manage and develop (OMD) model for concession period of 30 year.
IWAI had scrapped a tender to privatise the Varanasi terminal on the OMD model in January 2020, wherein the successful bidder would operate and manage the facility and also expand its capacity from 1.26 million tonne a year to 3.85 million tonne a year, within four years from the start of commercial operations.
All the four technically qualified bidders sought an eight-year time frame to invest Rs 334.38 crore in expansion, noting that four years was too short a time to raise money and invest in a nascent sector. The EOT model does not involve expansion of the terminals.
The Varanasi terminal is built by IWAI with an investment of Rs 200 crore (excluding land cost) with a capacity to handle 1.26 million tonne of cargo.
It is one of the three terminals built by India’s waterways development agency on the 1,400 km long Varanasi-Haldia stretch on National Waterway 1 with the World Bank funding. The other two such terminals are located at Sahibganj and Haldia.
The Varanasi terminal will be taken up on the EOT model with an initial concession period of 10 years. The concession can be extended by another five years linked to performance and on meeting some conditions. The tender terms for the Varanasi terminal do not include expanding the facility.
IWAI had constructed the Haldia facility at an investment of Rs 465 crore. It is a full-fledged terminal with no scope for any expansion. The Haldia contract will have a concession period of 15 years, which can be extended by five years.
The public, private, partnership appraisal committee (PPPAC) has cleared the privatisation of the Sahibganj terminal which was constructed with an investment of Rs 286 crore. The private operator will get the mandate to expand the terminal from 3.03 million tonne to 5.9 million tonne with an investment of Rs 300 crore.