Concerns mount over VOC port project cost estimates

26 Mar 2024 CW Team

Potential bidders express concerns regarding VOC Port's outer harbour box terminal project cost estimates. The estimated investment is Rs 70,559.5 million for a four million twenty-foot equivalent units (TEUs) capacity container terminal. Bidders call for re-evaluating the project's cost, which they deem to be at least 50% lower than realistic estimates.

The National Technology Centre for Ports, Waterways and Coasts (NTCPWC) prepared the Detailed Project Report (DPR) for the project, estimating Rs 6,984.5 million for breakwater construction and Rs 12,335.1 million for dredging in the basin and outer harbour channel for the first phase. Concerns arise regarding the accuracy of these estimates.

Port expert Devdatta Bose highlights discrepancies in the estimated costs, particularly for breakwater construction and dredging. He suggests a higher cost analysis, indicating potential underestimation by NTCPWC.

The port authority defends the estimates, citing the methodology used and the proximity of material sources for construction. They maintain that the estimates were submitted for approval in January 2023.

Potential bidders propose revisiting cost estimates or increasing viability gap funding (VGF) to 50% to ensure project viability. However, the port authority stands by its estimates, expressing confidence in the methodology used.

Secretary TK Ramachandran assures flexibility in revisiting project terms if necessary. He encourages potential developers to approach the project with a positive mindset, emphasizing its viability and market-driven tariffs.

Suggestions are made to enhance the project's attractiveness, including allocating land for a free trade zone. These suggestions are acknowledged for further consideration.

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