Kerala - Thiruvananthapuram   

New bidding method to boost State development

THIRUVANANTHAPURAM: The State government’s decision to adopt the Swiss Challenger System (SCS) to promote infrastructure projects is expected to give a big boost to development. The Ponnani port will become the first infrastructure development project to be promoted through this new bidding method.

The decision is a continuation of the LDF government’s policy of port development through public-private partnership through the Build Operate and Transfer route. Malabar Ports (P) Ltd, a Chennai-based company, has been asked to prepare a detailed project report (DPR) under the SCS, a mechanism that would give an advantage to the originator of a project proposal.

The government will appoint a consultant to technically evaluate the DPR after which global tenders will be invited.

The State government will also separately evaluate the consultant’s report on the terms and conditions of the DPR and the request for proposal documents to ensure that it is in line with the government policies prior to inviting global tenders.

Malabar Ports, which cannot participate in the global tender, will be given an opportunity to match the best bids. The company will get the project if it matches the best bid and would be able to run it commercially as per the government’s BOT norms. If it fails to clinch the offer, Malabar Ports will be compensated by the company that wins the bid.

The State government will enter into an agreement with the winning company to implement and operate the project.

The compensation amount will be indicated in the RPF documents at the time of global bidding.

The BOT arrangement offers a concession period of 30 years to the promoter, after one year for project formulation and three years for construction. If the construction is completed before three years, the balance time can be utilised for commercial operations in addition to the normal concession period. If the construction period goes beyond three years, the extended period will be deducted from the concession period. If the government decides to bid the project again after the concession period, the first right of refusal will be given to the original developer.

According to government sources, the project would be awarded on the basis of this BOT arrangement. The government would only be a facilitator and would not give the investor any financial assistance for supporting infrastructure, including new rail line, widening of existing road, water supply and electricity at any stage of the development process.

Sources said the State government planned to adopt the SCS for more projects. The Ponnani port had been put on the development block several years ago, but despite liberal port development policies, it had not made much headway. The SCS method is expected to revive interest in the port. The government had earlier appointed a consultant to prepare a DPR for Alappuzha as a cargo port in a public-private partnership mode.

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