India: Major Ports Adopt New Contracting Method to Dredge Harbours
Major state-owned ports are switching to a new contracting method to dredge harbours to attain the depths required to dock bigger vessels, which could cost more to deepen and maintain the shipping channels.
“ The assured depth method of undertaking dredging works will form part of the new dredging policy to be finalized soon by the government ,” said Rakesh Srivastava , joint secretary looking after ports in the shipping ministry. “Assured depth is a much better method of undertaking dredging works. The ports may have to spend more on dredging under this method, but it is beneficial to them.”
Major ports, or those controlled by the Union government, have been following the unit rate method for dredging where a contractor is paid on the quantity or volume of materials dug out from the seabed and measured in cubic metres.
The quantity to be dredged to reach a certain depth is estimated by the ports based on studies by specialized agencies.
In the assured depth method, a contractor is paid only after he reaches the specified depth irrespective of the quantity dredged.
“ You will never get the desired depth in case of dredging contracts based on the unit-rate method, ” said M. Guruprasad Rai , chief engineer of Cochin port, which suffered delays on a channel deepening work at its Vallarpadam container transshipment terminal earlier this year. This is because as soon as a contractor dredges the volume agreed on, he stops work irrespective of whether the depth needed by the port is achieved or not, he added.
India's major ports plan to spend as much as Rs.10,000 crore till 2020 to deepen and maintain shipping channels to accommodate bigger vessels, according to the maritime agenda for the decade announced by the shipping ministry on 13 January.
“T he drafts (depth) at major ports (both in the channels and at berths) have historically been very low and not commensurate with the developments taking place in the world in terms of change in ship sizes, higher parcel sizes, changes in cargo trends, such as containerization, project cargoes, etc., ” the 10-year plan said.
Ports are required to increase the drafts to at least 14m and up to 17m, according to the potential of bigger size vessels calling a particular port, it said.
Jawaharlal Nehru port is the first to adopt the new method of dredging contracts ahead of the finalization of the policy, shipping ministry's Srivastava said.
India's busiest container port is adopting the assured depth method for a Rs.1,212.5 crore project to widen and deepen its channel, a key factor in its expansion plans.
A public tender floated by the port in May for the contract has attracted five initial bids including from state-run Dredging Corp. of India Ltd , a joint venture of Dredging International NV and Van Oord Dredging and Marine Contracting Co. NV; Jan De Nul NV; Royal Boskalis Westminster NV; and Hyundai Engineering and Construction Co. Ltd.
In the new model, it is the contactor's responsibility to ensure the assured depth even if he encounters any unexpected additional geological hurdles, said PY Deshmukh, chief manager for planning and development at Jawaharlal Nehru port.
An executive at one of the Dutch dredging firms bidding for the contract said the assured depth model will raise dredging costs because of the higher risk for contractors.
“ Under this method, the risk involved in undertaking the work is totally transferred to the contractor, ” the executive said on condition of anonymity because he is not authorized to speak with the media. “ When the contractor's risk increases, he will ask for more money.”
But the new model will help ports finalize a dredging budget without the need to go for cost revisions later, a practice common under the unit rate method, said Cochin port's chief engineer Rai. Cochin port had to scrap the contract given to a private dredging firm for the Vallarpadam trans-shipment terminal and hire a new contractor to complete the unfinished job, he added.
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