THIRUVANANTHAPURAM: The Government's decision to extend the bidding process for the development of an international container transhipment terminal at Vizhinjam was based on indications that some of the prospective investors are gearing up to form an international consortium for the project, according to officials in the Department of Ports.

The last date for submission of techno economic bids has been extended to July 30. As many as 18 companies, including 11 foreign firms, had bought the request documents to participate in the bid.

Dr. Jayakumar, Chief Executive Officer, Vizhinjam International Seaport Ltd., said the decision to extend the last date by seven weeks was based on a request from some of the prospective bidders who had opened discussions with supporting companies to form an alliance.

"For a project of this magnitude, a consortium involving a shipping line, construction firm, investor and port developer makes sense. The Government also feels that a partnership will result in more competitive bids," he said.

Dr. Jayakumar said investor confidence in the project was evident from the number of companies that had sought request documents. The foreign firms that have expressed interest include Marubeni of Japan; Giss-Eta of the U.S.; Zoom Developers, Mumbai; CMA CGM Global (India) Ltd; Essar Shipping; First Wallstreet Group and Consortium, New York and Ital-Thai Development Company, Bangkok.

The Singapore Ports Authority is also understood to be interested in the Vizhinjam project, though as an alliance partner. A senior official in the Department of Ports said the project structure and the flexibility in design parameters had appealed to the prospective bidders.

"For one, the State Government has expressed willingness to share the risks by picking up 24 per cent equity in the project. The Government's commitment to provide road and rail links and power connectivity is another positive factor," he said.

Bid conditions

The Government had also relaxed the bid conditions in view of the greenfield status, the long gestation period and the cost-intensive marketing efforts needed to wean container traffic away from transhipment terminals such as Singapore, Colombo and Salalah where 80 per cent of Indian containers are currently handled.

The first phase of the Vizhinjam project, estimated to cost Rs.1,850 crores, envisages the construction of a 1,245-metre long berth to handle vessels of 8,000 TEU.

The phase is slated to be completed in five years.

In the second phase, four more main lines and nine feeder berths will be constructed.

The total cost of the project is put at Rs.4,200 crores.

Foreign exchange

According to a study conducted by IL& FS, the strategic adviser to the project, the project will save valuable foreign exchange to the tune of Rs.1,000 crores annually by providing the facility to transfer container cargo from mother ships to smaller vessels.

The inherent advantage of a 24- metre draft endows Vizhinjam with the potential for development as a mega container transhipment hub capable of handling the giant post-Panamax class of carrier ships.

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