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• PSA International Pte Ltd took its biggest gamble in India when it pitched a record bid last June for a container loading facility at Jawaharlal Nehru (JN) port, but now finds the odds stacked against it because of the very bid.A consortium led by PSA, the world’s second-biggest container port operator, quoted a revenue share of nearly 51% for the Rs. 6,700 crore project, the highest quoted by a private operator in the history of India’s container port privatization programme that began in 1997. That’s far higher than the average revenue share of 35-40% for such projects.
  Cargo-handling contracts at Union government-controlled ports such as JN port are decided on the basis of revenue share—the bidder agreeing to share the highest quantum of annual revenue with the port wins the contract, typically stretching 30 years.

• The first sign of strain in the project came to the fore a few days ago when PSA indefinitely pulled out of an event, slated for 11 January, to sign a concession agreement with JN port. The issue was over who would bear the stamp duty for registering the document. The duty is a matter of debate: It can range between Rs. 50 crore and Rs. 335 crore, depending on what basis it is calculated. This hasn’t been decided yet. The pull-out has added to speculation in the port industry that PSA was looking for an excuse to quit the project after it made the record bid only to find it unfeasible. Mint could not ascertain this.A concession agreement is crucial because it lays down the terms and conditions of contract and sets a project in motion.A JN port official said the agreement will now be signed only after the stalemate over the stamp duty is sorted out. No one can say when this will happen. Even if this issue is resolved and the agreement signed, the next hurdle will lie in getting banks to lend for the construction of the terminal.

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