Container Terminal project thrown into turmoil, all seven contenders out
Five consortia and two single bidders submitted EOIs after the tender opened on June 6, 2016. None of them now qualifies under criteria unexpectedly introduced on November 23 by the CCEM.
No less than four bodies are involved in evaluating the tender: a Cabinet Appointed Negotiating Committee, a Technical Evaluation Committee, the CCEM and a separate Ministerial Committee. In fresh instructions, the CCEM has directed the Ministerial Committee to rule out any Government entities from the tender; to disallow regional competitors and operators who are already engaged in the Colombo Port; and to require that the main company of any consortium has experience in terminal operations and the secondary firm in port management.
“This whole thing might take time now,” the official earlier cited said. “We may have to cancel the process and go for fresh tenders or take a decision without calling for tenders.”
None of these conditions was present when EOIs were initially invited. The original document permitted the participation of any private entity; Government-owned entity; or several such entities in one group of entities or different entities or combination of any one or more of such entities in a consortium.
“You cannot bring in new regulations after an EOI is floated,” said an industry source, on condition of anonymity. “The public had confidence in this process because the Asian Development Bank (ADB) is the transactional adviser. We thought there would be transparency and credibility. Technically, going by the new criteria, all seven applicants are disqualified.”
The industry strongly feels that these conditions were introduced to “favour a predetermined party”, the source said. “But something went wrong somewhere because nobody is eligible now.”
The two single bidders are Terminal Investments Limited SA and Transnet SOC Limited. One of the consortia is made up of CMA CGM, Evergreen Corporation (Taiwan) Ltd, Summit Alliance Port Limited and China Merchants Port Holdings Company Ltd.
Terminal Link and CMA CGM have also jointly submitted an EOI.
A third consortium is Mistui & Co Ltd with Westports Holdings Berhad, NYK Line, Mistubishi Logistics Corporation, Hayleys PLC and Tata Realty and Infrastructure Ltd.
Another is made up of Aitken Spence PLC with PSA International Pte Ltd, Shapoorji Pallonji and Company Pvt Ltd and Pacific International Lines Pvt Ltd.
The last consortium that expressed interest is APM Terminals BV with Maersk Line A/S, John Keells Holdings PLC and Container Corporation of India Ltd.
Among them are Government organisations, regional competitors, parties that already have a presence in the Colombo Port and consortia comprised partners with no experience in terminal operations or port management.
“Without courting litigation, this can’t go ahead in the current form,” said another shipping industry source, also requesting anonymity. “Is the ADB also a part of this skulduggery? The conditions are illogical. There is one that disqualifies all global port operators in the same breath as saying wide terminal experience is expected.”
This is not the first time the CCEM has brought in new criteria to the East Container Terminal BOT process. The first advertisement calling for EOIs specified the closing date as July 21, 2016. But on July 29, an addendum was issued extending this to August 31 and publishing an additional criterion that said: “Further, taking into account 70% of the throughput of the Port of Colombo is sub-continental traffic, weightage will be given to a consortium which includes a strategic investor from the region, having no less than 20% shareholding in the consortium.”
On September 6, an addendum was issued further extending the closing date to September 20, 2016. No reasons were divulged for any of these decisions.
The CCEM is headed by Prime Minister Ranil Wickremesinghe. Its other members are Ravi Karunanayake, Malik Samarawickrama, Sagala Ratnayake, Nimal Siripala de Silva, Rauf Hakeem, Anura Priyadharshan Yapa, Champika Ranawaka, Kabir Hashim, Arjuna Ranatunga and Sarath Amunugama.