Adani Ports excluded from bidding for Deendayal Port tender over monopoly policy.

Adani Ports and Special Economic Zone Ltd. (APSEZ) has been excluded from a tender issued by Centre-owned Deendayal Port Authority to develop fertilizer and other clean cargo handling facilities at one of its berths, citing an anti-competitive policy framed by the government in 2010.

The ‘policy for preventing private sector monopoly in major ports’ (owned by the Central government) was issued by the Ministry of Ports, Shipping and Waterways in August 2010, to check the emergence of private monopoly in terminal operations at state-owned ports.

“If there is only one private terminal/berth operator in a port for a specific cargo, the operator of that terminal/berth or his associates shall not be allowed to bid for the next terminal/berth for handling the same cargo in the same port," according to the policy.

APSEZ had agreed to abide by the “monopoly policy” when it won a contract from Deendayal Port in 2012 to build a dry bulk cargo handling terminal located off Tekra near Tuna at the port. The terminal started operations in December 2014.

“The monopoly policy was incorporated in the concession agreement signed between Adani Kandla Bulk Terminal Pvt Ltd. (a unit of APSEZ) and Deendayal Port Authority in June 2012,” multiple sources said.

“According to the concession agreement, APSEZ or its affiliates cannot participate in the next tender issued by Deendayal Port Authority for the same cargo,” a government official and one of the sources mentioned earlier, said.

By submitting its documents to participate in the tender to develop fertiliser and other clean cargo handling facilities at Berth No 14 at Deendayal Port, APSEZ “violated” the anti-competitive policy condition stipulated in the Tekra-Tuna dry bulk cargo terminal contract, the official said.

“APSEZ has not been disqualified to participate in the tender for Berth No 14, but it is restricted from participating due to the monopoly policy,” the official added.

The Ministry of Ports, Shipping and Waterways has “advised” Deendayal Port Authority to “stick to the provisions on monopoly policy in the concession agreement for the Tekra-Tuna dry bulk terminal” when the port authority sought its views on the matter, he added.

APSEZ challenged its exclusion from the tender in the Gujarat High Court. While issuing notices to the port authority on December 28, the court observed that “subject to the final outcome of the present writ application, the respondent (Deendayal Port) shall permit…(APSEZ)…to participate in the request for qualification (RFQ) stage of the tender process”.

The privatisation of Berth No 14 at Deendayal Port is part of the government’s National Monetisation Pipeline that seeks to divest operational infrastructure assets through the public-private-partnership (PPP) route.

The privatised Berth No 14 will have a capacity to handle 5.6 million tonnes (mt) of cargo and entail an investment of Rs. 300 crore.

HBL