Faster security clearance of bidders on cards for PPP port projects

After losing Rs 6,000 crore on asset monetisation proceeds last fiscal due to delayed security clearances, the ministry of ports, shipping and waterways (MoPSW) is mulling a framework that would allow faster clearances of bidders for port development under the public-private partnership (PPP) mode. 

The ministry has written to other ministries, including home affairs, defence and external affairs, seeking a “positive and negative list” framework.

Under this, prominent players and regular bidders in government tenders would not need to go through repeated clearances under normal circumstances.

Since ports are a subject of national security, bidders during the pre-qualification stage of government tenders need to be cleared for security risks.

These clearances are not given by MoPSW until inputs are received from the ministries of home affairs, defence and external affairs as well as the cabinet secretariat and the Intelligence Bureau.

The ministry wants to have a positive list of prominent players and a negative list of irregular and new entities.

“If there are 10-15 bidders for a project, it would save time and reduce delays if regular and established players are cleared de facto. The rest could be vetted in accordance with the standard guidelines. Informal deliberations are currently underway, where finer details are being taken up. However, there is a consensus that these delays are not good for the sector,” a senior official said.

Current guidelines mandate a deadline of 12 weeks for these inputs to be given by the ministries and departments but sources said this takes around 4-6 months. This delays the opening price bids.   

There are concerns that these delays could reduce the pace of infrastructure development of ports. 

According to the current guidelines, a security clearance accorded to a bidder is valid for five years. And, the validity only extends to tenders floated through the same port authority.

If a different port floats a tender around the same time, that requires a fresh round of clearances.

In 2012, the Centre had identified clearance bottlenecks as an issue for the sector and formed new guidelines. Under these, the concerned authorities would have to provide security clearance for all prequalification bidders within 12 weeks on a case-by-case basis. The provisions also mandated the sitting of an inter-ministerial committee to ascertain causes of delay and take action.

Business Standard had previously reported that clearance delays had created a roadblock to the ministry’s asset monetisation ambition in 2021-22, despite private interest in all the 13 port projects.

At the end of the fiscal year, it had been able to monetise only 14 per cent of its Rs 7,000 crore pipeline.

Many big-ticket projects such as development of the western dock at Paradip Port (Rs 3,000 crore) and container terminal at Jawaharlal Nehru Port (Rs 832 crore) only saw fruitful completion in the first quarter of 2022-23.

While the ministry had an initial monetisation target of Rs 4,680 crore for this fiscal year, it recently added 50 more PPP projects to its pipeline under the Sagarmala scheme. It also plans to expand its monetisation base.

CLEARANCE HURDLES

• Shipping ministry accounts for 2% of national monetisation pipeline at Rs 12,828 crore
• Award of big-ticket projects at Paradip Port delayed by 4 months and Jawaharlal Nehru Port by 9 months
• Centre could not award 86% worth of projects in FY22 due to lack of security clearance
• New framework sought to expedite awarding of projects
• More projects added to shipping ministry’s FY22 asset monetisation pipeline of Rs 4,680 crore