In a not entirely unexpected development, the JNPT Board has just announced that “In view of the delay and defaults at your (consortium) end, the letter of award is rendered null and void and is hereby withdrawn forthwith.”
In recent months, rumours have been circulating as to what was happening about the concession but in a letter to from (JNPT) Oct 16 to Lee Chen Yong, PSA’s CEO Middle East and South Asia that CM has managed to obtain, JNPT lists a number of issues of conflict including the payment of the stamp duty and also the withdrawal of ABG from the consortium.
Citing that the consortium “on one ground or another” had delayed and refused to execute the Concession Agreement while seeking to modify and amend it, JNPT said that “this was not permissible.”
JNPT considered that despite the considerable time and opportunity extended to the consortium it had “at all times avoided signing the contract” and “the delay in commencement of work (had caused) tremendous loss to the Trust and to the nation”.
As a result, not only was the award withdrawn but in view of “the huge loss to JNPT” the PSA bid security has been forfeited and appropriated by JNPT which also “reserves the right to invoke tender conditions for recovery of further loss caused to it by non execution of the concession agreement.”
Following the announcement, PSA International has broken its silence on the subject and issue a statement of regret.
“Following the announcement that the PSA-led Consortium had won the right to develop the JNPT4 project in September 2011, PSA worked expeditiously to prepare for the signing of the concession. However, there were unexpected developments and differences that arose on key issues along the way that were beyond our control. Notwithstanding PSA\’s best efforts to engage and discuss with all the relevant stakeholders, these differences were not satisfactorily resolved.
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. PSA has always upheld the belief that there is great market potential in India and we will continue to develop our existing portfolio of port projects in India and look for other opportunities to invest in the country.”