Local investors resent 'stringent' terms in pre-qualification bid
Thursday, 9 August 2007
Jasim Uddin Haroon
Local investors intending to participate in the international tender for appointment of investor-cum-operator for the New Mooring Container Terminal (NCT) in Chittagong port expressed resentment over, what they said, stringent terms and conditions.
The major terms and condition committee (MTCC), formed for finalising the pre qualification (PQ) document, held its third meeting at the conference room of the ministry of shipping July 29.
The meeting was presided over by Chittagong Port Authority (CPA) Chairman Commodore M Farooque.
The meeting took several decisions, which, the local operators claimed, would only suit overseas port operators.
"How can a local investor participate in the bid when the MTCC wants a company to have a net worth of US$ 60 million in the last three consecutive years?," Mohammed Amirul Haque, who represents the FBCCI in the committee, said while talking to the FE. Haque gave his note of dissent on this issue.
"The terms and conditions of PQ document were finalised in the third meeting according to the dictates of the consultant, IIFC, and the ministry of shipping officials to discourage local investors," he alleged.
According to the minutes of the third MTCC meeting, 30 per cent share of the selected NCT operator are to be offloaded within three to five years of commercial operation of the depo.
Earlier in the second meeting it was decided that the investor-cum-operator would float 49 per cent of share in local capital market within three years of the commercial operation of the depo.
But the World Bank (WB) representative commented that offloading of shares to this extent might discourage global operators to participate in the tender.
The meeting also decided that CPA would pay for 30 per cent of the consultancy fee while the remaining 70 per cent would be realised from the successful bidder.
It was further decided that the net worth of the participants of the bidding should be US$ 60 million for the last three consecutive years which according to the primary PQ terms was $40 million.
Similarly the equity stake has been raised to $30 million from the previous decision of $20 million.
The MTCC meeting added some new clauses relating to joint venture (JV) participation, which included number of partners, net worth of individual joint venture partners and their ability to provide equity in the project.
The third meeting decided that net worth and equity capability of any member of a joint venture should not be less than the amount worked out proportionately according to the respective share percentage.
The number of partners in the joint venture has been limited to four.
Other criteria for pre-qualification of bidders included operating experience in at least three terminals in more than one country during the last five years with a throughput of minimum 500,000 containers yearly in a single terminal.
Local investors intending to participate in the international tender for appointment of investor-cum-operator for the New Mooring Container Terminal (NCT) in Chittagong port expressed resentment over, what they said, stringent terms and conditions.
The major terms and condition committee (MTCC), formed for finalising the pre qualification (PQ) document, held its third meeting at the conference room of the ministry of shipping July 29.
The meeting was presided over by Chittagong Port Authority (CPA) Chairman Commodore M Farooque.
The meeting took several decisions, which, the local operators claimed, would only suit overseas port operators.
"How can a local investor participate in the bid when the MTCC wants a company to have a net worth of US$ 60 million in the last three consecutive years?," Mohammed Amirul Haque, who represents the FBCCI in the committee, said while talking to the FE. Haque gave his note of dissent on this issue.
"The terms and conditions of PQ document were finalised in the third meeting according to the dictates of the consultant, IIFC, and the ministry of shipping officials to discourage local investors," he alleged.
According to the minutes of the third MTCC meeting, 30 per cent share of the selected NCT operator are to be offloaded within three to five years of commercial operation of the depo.
Earlier in the second meeting it was decided that the investor-cum-operator would float 49 per cent of share in local capital market within three years of the commercial operation of the depo.
But the World Bank (WB) representative commented that offloading of shares to this extent might discourage global operators to participate in the tender.
The meeting also decided that CPA would pay for 30 per cent of the consultancy fee while the remaining 70 per cent would be realised from the successful bidder.
It was further decided that the net worth of the participants of the bidding should be US$ 60 million for the last three consecutive years which according to the primary PQ terms was $40 million.
Similarly the equity stake has been raised to $30 million from the previous decision of $20 million.
The MTCC meeting added some new clauses relating to joint venture (JV) participation, which included number of partners, net worth of individual joint venture partners and their ability to provide equity in the project.
The third meeting decided that net worth and equity capability of any member of a joint venture should not be less than the amount worked out proportionately according to the respective share percentage.
The number of partners in the joint venture has been limited to four.
Other criteria for pre-qualification of bidders included operating experience in at least three terminals in more than one country during the last five years with a throughput of minimum 500,000 containers yearly in a single terminal.