IRC Natural Resources Pvt Ltd has pipped the Adani Group and DP World Ltd to emerge as the highest bidder on a tender issued by the Inland Waterways Authority of India (IWAI) to privatise the multi-modal river terminal at Haldia on National Waterway 1.

IRC Natural Resources quoted the highest royalty of ₹105 per metric tonne of cargo handled at Haldia MMT to be paid to IWAI when price bids were opened on Monday, sources told BusinessLine.

Adani Ports and Special Economic Zone Ltd (APSEZ) quoted a royalty of ₹80 per metric tonne while Hindustan Infralog Private Limited (HIPL), a joint venture between the Dubai government-owned DP World and India’s National Investment & Infrastructure Fund (NIIF), placed a royalty price bid of ₹43 per metric tonne.

Privatisation of terminal

The Haldia MMT, with a capacity to handle 3.26 million tonnes (mt) of cargo a year, is being privatised on the Equip, Operate, and Transfer (EOT) model. The IWAI had constructed the Haldia facility with an investment of ₹465 crore. The successful bidder will have to install cargo handling equipment at the facility.

The contract will have a concession period of 10 years which can be extended by five years.

The multi-modal terminals at Haldia, Varanasi, and Sahibganj were built by India’s waterway development agency as part of the Jal Marg Vikas Project (JVMP) — the 1,390-km long Varanasi to Haldia stretch along River Ganga, with a $375 million loan from the World Bank.

IWAI had made three unsuccessful attempts to privatise Varanasi and Sahibganj multi modal terminals.

Implementation of contract

Though the tender for Haldia MMT has reached a conclusion with the emergence of IRC Natural Resources as the highest bidder, industry sources are sceptical about the implementation of the contract due to the high royalty the company has agreed to pay.

The IWAI has set cargo and vessel related charges at these terminals.

For fly ash, a major cargo to be handed at the Haldia MMT, the IWAI has set a ceiling rate of ₹170 per metric tonne as against the current handling rate of ₹125 per metric tonne. That leaves IRC with only ₹20 per metric tonne to meet operational expenses and make a profit after paying the royalty.

“It will be very difficult to operate the terminal … the project may remain a non-starter,” said sources.

Source: The Outreach