West Bengal Government Set To Award Tajpur Port Development Project To Adani Group

With the Supreme Court on Monday (Sep 5) ruling that the Adani Group’s disqualification from the Visakhapatnam Port project cannot be treated as an “ineligibility” that bars it from bidding for other port projects, the West Bengal Government is likely to award Tajpur greenfield port project to Adani Ports and Special Economic Zones (APSEZ), India’s largest port operator.

A bench of Justices M.R. Shah and Krishna Murari upheld an earlier order of the Andhra Pradesh High Court that the termination of a concession agreement between Adani and the Visakhapatnam Port Trust (VPT) will not act as a disqualification for APSEZ from participating in future tenders floated by public bodies.

The termination of the contract by VPT had a cascading effect on APSEZ. Jawaharlal Nehru Port Authority (JNPA) of Mumbai disqualified Adani from a global tender to operate and maintain a container terminal in Navi Mumbai.

Chief minister Mamata Banerjee is scheduled to preside over an administrative review meeting in which the award of greenfield port project is likely to taken up.

In March this year, APSEZ emerged as the highest bidder in a public tender floated by West Bengal Industrial Development Corporation ( WBIDC) for the greenfield development of Tajpur port. Sajjan Jindal-led JSW Group also participated in the bid.

While JSW Infrastructure Ltd reportedly offered to pay 0.23 per cent of the gross revenue realised from the port, APSEZ offered to pay a modestly higher amount — 0.25 per cent of the gross revenue — to the government.

In October 2021, the West Bengal government invited bids for developing a greenfield, private deep sea port at Tajpur in East Midnapore district of the state on design-build-finance-operate-and-transfer basis.

The port is proposed to be developed on a straight beach front and will be located located very close to mineral-rich belts of West Bengal, Jharkhand and Odisha. The identified site is located 180 km from Kolkata and 10 km from Digha.

After a tepid response during a previous round of bid, the state government offered ''better'' conditions such as 1000 acres of encumbrance-free land to attract investors.

The state is also offering a concession period of 99 years against the usual 30-35 years in such projects, the WBIDC official said. WBIDC serves as state’s nodal body for industrialisation.

The state government is also proposing to invest Rs.4,200 crore on this project.

In December 2020, the West Bengal Maritime Board called for letters of intent from firms interested in developing the proposed port but the response was lukewarm.

Previously, the state government had proposed that the port be built on reclaimed land as it is against forcible land acquisition for industry. ''Now, the state government is offering 1000 acres of encumbrance-free land. The government is also flexible on the quantum of land to be reclaimed,'' the official said. The reclamation has to be done by the port developer.

A land swap deal between the West Bengal Industrial Development Corporation (WBIDC) and the West Bengal State Electricity Distribution Company (WBSEDCL) also significantly brightened the prospects for the proposed port. 1000 acres at Dadan Patra Bar near Tajpur was earmarked for solar project under WBSEDCL will be swapped with land earmarked for building industrial parks by WBIDC.

Several port developers, who had shown initial interest in the Tajpur project, later expressed certain reservations, compelling the government to invite fresh bids offering relaxed norms. Besides presenting a concession period of 99 years, the state government is freeing the prospective investor from the cost of connectivity infrastructure like roads and railways which will help it reduce capex.

Tajpur will be the second port project that the Adani Group is set to manage in Bengal. It recently took up modernisation and operation of a berth in Haldia.