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Wednesday, July 24, 2024

Maharashtra Initiates Swiss Challenge for Murbe Port Bids Despite Proximity to Vadhavan Port Project

In a surprising move that raises concerns about haphazard port development, the Maharashtra Maritime Board (MMB) has initiated a global bidding process for the construction of a new port in Murbe, Palghar district. This decision comes after JSW Infrastructure Ltd, led by Sajjan Jindal, presented a self-initiated proposal to build a port merely 40 kilometers away from the Union government’s Vadhavan Port project in the same district.

The estimated cost of the new Murbe port is around Rs4,259 crores, catching the port industry off guard. Notably, MMB holds a 26 percent stake in the ongoing Vadhavan Port project, which recently obtained environmental and coastal regulation zone clearances, paving the way for its construction after overcoming local opposition and challenges.

The Vadhavan Port, with a capacity of 298 million tonnes and a projected cost of Rs76,220 crores, is awaiting final investment clearance from the Union Cabinet. The project is under the purview of the Jawaharlal Nehru Port Authority (JNPA), where the state holds a 74 percent stake, and Prime Minister Narendra Modi is expected to lay the foundation stone in the coming days.

The Swiss Challenge method is being employed for the Murbe port, wherein the original proposer, JSW Infrastructure, has the opportunity to match the highest bid from an open auction. If JSW declines, the project goes to the highest bidder. Murbe is planned as a public-private-partnership (PPP) on a Design, Build, Own, Operate, Transfer (DBOOT) model.

The bidder offering the highest Minimum Assured Annual Income will be chosen as the preferred bidder. If JSW’s commercial offer is not preferable, they have 30 days to revise it. Failure to do so will lead to further negotiations with the preferred bidder before finalizing the project.

The proposed Murbe Port is strategically located, connected to NH-8 via a 4-lane state highway, enhancing its potential to serve various industries in the hinterland, including MIDC and industrial areas in Maharashtra and Gujarat.

Despite these plans, the port industry expresses skepticism about the Murbe Port project. Concerns include the lack of scientific studies and prior environmental assessments, potential legal challenges, and environmental degradation in an ecologically fragile zone. Moreover, connectivity, especially the challenging rail link crossing multiple tracks and highways, poses a significant hurdle.

JSW Infrastructure’s decision to propose Murbe as an alternate location, following protests against their Thane district plan, has raised questions about their expansion strategy. Critics argue that considering Vadhavan Port, slated to begin operations by 2030, could have been a more viable option during cargo handling contract tenders, instead of pursuing a new port likely to face strong opposition from locals.

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