DPA cancels shipbuilding cluster tender after receiving sole bid

Following a single bid from Pune-based Accurate Industrial Controls Pvt Ltd, supported by Korea Maritime Consultants Co., Ltd (KOMAC), the state-owned Deendayal Port Authority (DPA), which operates the port at Kandla in Gujarat, has canceled a private-funds tender to construct an integrated shipbuilding cluster on 2,000 acres of land.

The Accurate Industrial Controls-KOMAC joint venture’s pricing bid was not opened by the Deendayal Port Authority, which has concluded the tender. According to the source, the port administration intends to re-tender the project after modifying the bidders’ minimal qualification requirements. According to the terms of the tender, the port authority had stipulated that in order for entities to be eligible for the auction, they had to design, build, and operate a shipyard with the capacity to produce ships of the so-called very large crude carrier (VLCC) class directly, rather than through a joint venture or consortium.

Leading South Korean shipbuilders were considered when designing the tender. However, South Korean shipyards are not interested in making direct investments in Indian shipbuilding facilities. They want to use joint ventures to accomplish this. Since Indian firms lacked the capacity or experience to handle a project of this magnitude on their own, some prospective local bidders requested during the pre-bid meeting that the qualifying requirements be loosened to allow joint ventures or consortia to participate. The port authority let firms to form consortiums or joint ventures toward the end of the bidding process, even though it maintained its position that only bidders with the necessary experience could participate.

However, the minimal qualification requirements specified in the tender were not altered by the port authorities. Therefore, even though the port authority permitted bidders to organize consortia or joint ventures in order to compete, no one benefited until the minimum qualification criteria was amended to require that bidders, whether directly or through consortia or joint ventures, have experience.  Additionally, the port authority felt that the Indian partner “was not up to the mark” and was “uncomfortable” with the single proposal. “The revised minimum qualification requirements for bidders will be explicitly stated in the new tender.