India: Jawaharlal Nehru Port Dredging Plan Faces Obstacle
Hyundai Engineering and Construction Co. Ltd failed to qualify for the Rs.1,571.60 crore channel-deepening tender of state-owned Jawaharlal Nehru (JN) port because one of the dredgers it had offered for the work was more than 15 years old. Monday, 09.Apr.2012, 01:19 (GMT+3)
Hyundai Engineering and Construction Co. Ltd failed to qualify for the Rs.1,571.60 crore channel-deepening tender of state-owned Jawaharlal Nehru (JN) port because one of the dredgers it had offered for the work was more than 15 years old.
One of the conditions mentioned in the tender was that the dredgers executing the contract should not be more than 15 years old.
The bidding group complained that it was wrongly disqualified from participating in the auction, and explained that the dredger was originally a bulk carrier built in 1985 and converted into a dredger in 2002. By calculating the age from the date of the conversion they argued the dredger met the age norms stated in the tender.
An executive with a project management consulting firm said: â€śWe told the shipping ministry that the age of a ship is counted from the date the keel is laid and not from the date of its conversion. However, to be on the safe side and to nip any possibility of litigation, the shipping ministry has referred Hyundaiâ€™s complaint to the law ministry for opinion whether it is tenable or not.â€ť
A spokesperson for the port said a joint venture of Dredging International NV and Van Oord Dredging and Marine Contracting Co. NV; Jan De Nul NV, and Royal Boskalis Westminster NV submitted their price bids to the port on 24 February.
After the project cost was cleared on 1 March, the JN port decided to open the price bids on 5 March to select the company to execute the contract, according to livemint.com.
But due to Hyundaiâ€™s complaint, the opening of the price bids was called off.
After that, the government effected a change in the calculation of customs duty on dredgers. An executive with one of the bidding groups said: â€śThe change will have a cost impact on dredging projects in the range of 8-25%.â€ť
The three bidding groups were asked to put new price bids.
JN port, Indiaâ€™s busiest container port, was trying to execute the project for the past six years. The project would expand its capacity by deepening the channel to 14 metres to allow bigger ships to dock. The project is expected to be completed by 2014.