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Government grants security nod to three port gear makers

LiveMint logoLiveMint 12-06-2014 P. Manoj

Bangalore: The government has granted security clearance to three top port cargo-handling gear makers as it look at ways to break a logjam over delays in building port projects.

US-based Terex Corp., Finnish company Cargotec Oy and Anupam-MIH Industries Ltd have been given security clearance to supply gears to Indian ports, a spokesman for the shipping ministry said. Anupam-MIH Industries is a joint venture between Anupam Industries and Mitsubishi Heavy Industries Ltd of Japan.

The security clearance is valid for a three-year period, according to the guidelines for security clearance for port projects approved by the cabinet in December 2012.

The delay in getting security clearance was one of the reasons for the slow implementation of several port projects over the last three-four years.

The previous United Progressive Alliance (UPA) government last year introduced new rules that require security clearance for equipment suppliers to cargo terminals. Till then, such a clearance was required only for port developers selected through a competitive bidding process.

The immediate beneficiary of the security clearance is a new container loading facility being built by Gammon Infrastructure Projects Ltd at Union government-owned Mumbai Port. The construction of the terminal has been delayed by over three years.

Gammon has completed the construction of the berth for the `1,228 crore project, but is unable to start operations because the port is yet to complete the dredging work and hand over the entire back-up area required to store containers. Gammon was also awaiting security clearance from the government for buying cranes used for loading and unloading containers at the terminal.

Gammon had earlier placed an order with China’s state-owned port container crane maker Shanghai Zhenhua Heavy Industries Co. Ltd (ZPMC) for six quay cranes and 20 rubber tyred gantry cranes worth `500 crore. But it had to cancel the order after the government denied security clearance last year to the Chinese firm.

To avoid delays, Gammon then made an application to the government for security clearance to the three gear makers mentioned earlier, before placing orders. A spokesman for Gammon Infrastructure confirmed receiving the government’s security clearance for the three gear makers. “We will now restart the process for ordering cargo-handling equipment from one of the three firms,” the spokesman added.

The first phase of the new facility with a capacity to load 1.2 million standard containers a year was slated to start operations in December 2010. The facility is now expected to start in December 2015, the Gammon spokesman said.

The delay has escalated the project cost to about `1,500 crore.

Gammon had sought a compensation of `350 crore from Mumbai Port for failure to fulfil its obligations under the contract that has delayed the opening of the container terminal the firm is building there, Gammon said.

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