SINGAPORE - Temasek-owned PSA International's grand plans for a fifth container terminal in India has ground to a halt for now.
The port operator told BT it will bow out of a much-delayed US$1.2 billion container terminal project in Mumbai after the Jawaharlal Nehru Port Trust (JNPT) last month tore up the contract it awarded to PSA and its local consortium partner, ABG Ports.
"We regret the decision by the Jawaharlal Nehru Port Trust Board to withdraw the letter of award earlier issued to the PSA-led Consortium for the development of the JNPT4 container terminal project," said a PSA Corporate spokesperson.
Last September, the PSA-led consortium beat out five other parties to design, build, finance and operate the JNPT4, a container terminal that was to be India's largest foreign investment into a port.
JNPT4 would have been PSA International's largest container terminal in India with a designed capacity of 4.5 million twenty-foot equivalent units (TEUs).
However, progress on JNPT4 began to lose steam in January 2012 when PSA, - the 74 per cent majority partner in the consortium - did not sign the concession agreement.
The first hold-up was an unspecified stamp duty sum that was to be paid to the Maharashtra local government in order to register the concession documents.
The stamp duty is understood to range between 60 million rupees (US$1.1 million) and 3.35 billion rupees (US$62 million).
JNPT4 ran into another spot of difficulties in April 2012 when PSA's local partner ABG told JNPT it wanted to withdraw from the consortium and the project.
Four months later, the port trust told the consortium ABG could not pull out and slapped a final deadline of Sept 10 for the consortium to sign the concession agreement.
On Sept 17, JNPT told the Indian media it was terminating the contract with the PSA-ABG team and had cashed the consortium's US$12 million bid guarantee.
The consortium was also told it could revive the contract if they paid a further 3.5 billion rupees (US$65.2 million) in performance guarantees.