Port industry says it’s a classic case of reckless port planning and development in the country as no proper scientific studies and prior environmental assessment has been carried out for Murbe Port, hardly 40 kms away from the planned Vadhavan Port

MUMBAI: In a shocking illustration of reckless port planning and development, Maharashtra Maritime Board (MMB) has called global price bids on a so-called Swiss Challenge method to construct a new port at Murbe in the state’s Palghar district after Sajjan Jindal-led JSW Infrastructure Ltd placed a suo moto proposal to build the new port, hardly 40 kms away from the Vadhavan Port being developed by the Union government in the same district.

The new port, estimated to cost some Rs4,259 crores, has taken the port industry by surprise when the Maharashtra Maritime Board is a 26 percent stake holder in the planned Vadhavan Port project, which has received environmental and coastal regulation zone clearances from the Ministry of Environment, Forest, and Climate Change on 16 February after a gruelling process, navigating strong opposition from locals and fishermen, clearing the decks for its construction.

The planned new port at Vadhavan is now awaiting final investment clearance from the Union Cabinet. The project will be helmed by state­ owned Jawaharlal Nehru Port Authority (JNPA) holding 74 percent stake.

Prime Minister Narendra Modi is expected to lay the foundation stone in the next few days for the Rs76,220 crores, 298 million tones capacity Vadhavan Port project.

Under the Swiss challenge method, the entity that made the original offer is given a chance to match the highest bid discovered through an open auction. If the entity that had put in the original offer declines, then the deal is given to the highest bidder.

Murbe, located between Ucheli Creek and Satpati Creek, is planned to be built on a public-private-partnership (PPP) – Design, Build, Own, Operate. Transfer (DBOOT) model.

The bidder offering the highest Minimum Assured Annual Income (commercial offer) to MMB will be nominated as the preferred bidder.

The commercial offer of the original project proponent (JSW Infrastructure) would be compared with that of the preferred bidder. If the commercial offer of JSW Infrastructure is not preferable to that of the preferred bidder, the original project proponent shall be given an opportunity to make his commercial offer competitive with that of the preferred bidder within a period of thirty days from the date on which he has been given the opportunity.

If the original project proponent fails to do so within the said period, MMB will enter into further discussions with the preferred bidder to finalize the successful bidder ahead of issuing the letter of award for the project, according to the bid documents seen by ET Infra.

The successful bidder will have to submit a Detailed Project Report (DPR) for the project within one year of receiving the letter of award. The DPR shall be more advanced or in line with the DPR submitted by JSW Infrastructure and shall adhere to the cargo handling capacity, planning for port linkages and land acquisition as committed by the successful bidder in the concept plan submitted as part of the bid. MMB said it reserves the right to reject the DPR or part of the DPR that differs significantly from the parameters proposed by the successful bidder in the concept plan.

The proposed Murbe Port is connected to NH-8 via a 4-lane state highway (Boisar Road) located approximately 23 km away. The state highway connects NH-8 to the Maharashtra Industrial Development Corporation (MIDC) area.

Major industrial centers and business hubs in the hinterland of the proposed port enhances the port’s potential to cater to a diverse range of cargoes. The proposed port’s hinterland includes the Maharashtra Industrial Development Corporation Area (MIDC), Tarapur Industrial Area (TIA) in the State of Maharashtra and the Vapi and Valsad Industrial Area (VIA) in Gujarat. “The proposed port may readily cater to the needs of these industries:’ MMB wrote in its bid documents.

Incidentally, Sanjay Sethi, an Indian Administrative Service (IAS) officer of the Maharashtra cadre, who was until recently the Chairman of JNPA, is the Additional Chief Secretary looking after the Transport and Ports Department (under which MMB comes) in the Maharashtra government.

Sethi, who ended his five-year tenure as JNPA Chairman on 2 January, was involved in successfully steering the environmental and coastal regulation process and other challenges in the Vadhavan Port project during his time at the port.

Port industry is sceptical about the Murbe Port project.

“The port is being offered without any scientific studies and prior environmental assessment. Already much resistance from locals and fishermen is happening in the area, considered an ecologically fragile zone, as borne out by the environmental and CRFZ clearance process for the Vadhavan Port. Suddenly, MMB is seeking financial bids for a port at Murbe. Why are they taking on so much potential legal challenges for one firm’s offer;’ said a port industry source with knowledge of the matter.

“How much environmental degradation will they do by building a port just 40 kms away from Vadhavan;’ he asked.

Besides, connectivity will be a “major challenge” for Murbe Port, particularly the rail link which has to cross 4-5 tracks and highways, entailing the need for constructing a long bridge. “All these at what cost;’ the industry source said.

Maharashtra government sources said that JSW Infrastructure has proposed building a new port at Murbe after its plan to develop a facility at Nandgaon-Alewadi in Thane district ran into protests from locals and fishermen from the area, making it a non-starter.

“JSW Infrastructure has offered Murbe as an alternate location to the state government,” the Maharashtra government source added.

The port industry source mentioned earlier said that JSW Infrastructure could have looked at Vadhavan port for their expansion needs when tenders are floated for cargo handling contracts instead of pursuing a new port at Murbe which is expected to face strident opposition from locals.

Vadhavan Port is slated to begin operations by 2030.