Security snag blocks port projects

Delay in security clearance for three Chinese firms have become a stumbling block in three different container terminal projects worth Rs 6,000 crore.

Hutchison Ports Holdings, which has bid for Mumbai Port and Chennai Port, has not yet received security clearance.

To add, two Chinese firms -- the Kaidi Electric Company and the China Harbour Engineering Company-- have also not received security clearance from government for developing Rs 4,300 crore international transshipment container terminal at Vizhinjam, Kerala.

As a fallout of this delay, the government has asked the Mumbai Port Trust and Chennai Port Trust to extend their bidding deadlines of container terminal projects to August 31 from July 31.

This is 12th extension for the Rs 1,200 crore box terminal project of Mumbai Port and has been delayed for over two years.

"The Government is neither giving security clearance or asking ports to ahead without Chinese firms. This persistent delay is virtually killing these critical projects," a shipping industry analyst said.

Hutchison Ports Holdings, a wholly owned subsidiary of Hutchison Whampoa, has tied up with engineering and construction major Larsen & Toubro for bidding Rs 1,200 crore offshore container terminal project at Mumbai Port and Rs 500 crore second container terminal at Chennai Port.

"Though Mumbai Port has submitted Manila-based International Container Terminal Services Inc as alternate terminal operator in place of HPH. However, government has not taken any decision on alternate arrangement too," a government official said.

A senior Mumbai Port official confirmed the extension of deadline to August 31, while Vizhinjam Seaport chief executive officer Jayakumar declined to comment.

Kerala Home Minister Kodiyeri Balakrishnan said the senior state officials are taking up the issue with central government.

"We are waiting for a positive response from central government. We will take a suitable decision shortly," he said.

Meanwhile, sources said government is exploring other options including re-tendering the project to avoid inordinate delay.