Deal tangle

Calcutta, March 22: ABG Infralogistics Ltd has written to the board members of the Calcutta Port Trust for approving its Haldia project.

Though the CPT management has given ABG the contract for mobile cranes for berths 2 and 8 at Haldia, the board of trustees had failed to arrive at a consensus at their meeting on February 23.

ABG chief executive officer C.B. Rajeev in the letter to the trustees said the port would gain around Rs 1,200 crore during the contract period in the form of additional cargo, handling and vessel-related charges.

Users would also stand to gain Rs 5,700 crore through reduced handling charges, and savings in vessel detention charges and through less delays during berthing. This would be made possible by diminishing the role of the stevedores.

Not only is the CPT board divided but also some CPT officials are opposed to the deal. They believe the deal will lead to a loss of Rs 70 crore.

Officials handling CPT’s finances are in favour of a revenue-sharing model instead of the contracted build-operate-transfer.

There is a call to scrap the deal and float a fresh tender.

ABG was the lowest bidder by quoting Rs 69 per tonne for berth 2 and Rs 80 per tonne for berth 8, beating Sical Logistics and Tata Steel.

Rajeev in the letter argued that effective savings would be higher in revenue sharing.

Under the contract, the port was to pay ABG for handling cargo. The company would have to put up the crane at its own cost. The contract will be valid for 10 years from the date of issue of letter of intent by the port.

According to ABG, the deal will enable the port to charge around Rs 130 per tonne for handling cargo from the ship to the trucks or wagons on berth 2 and 8.

At present, the port handles the cargo in the initial part of the logistics chain and charges around Rs 22.5-Rs 40 per tonne.

The rest of the loading and unloading is done by the stevedores who charge Rs 100-Rs 200 per tonne.

Hence, one has to pay Rs 120-240 per tonne as handling charges. If ABG gets the deal, the handling charge will be lower at around Rs 130 per tonne.

ABG alleged that the stevedores wanted to scuttle the deal as they stood to lose the most.

Dissenting officials insist that the revenue-sharing model will benefit both the users in terms of lower cost of operation as well as earn more for the port. A new tender could push back the process by another two years.