Rajeev Chandrasekhar’s company got greenfield Vijaydurg port without tender for 50 years

Mumbai Maritime Board, on a BOOST basis, gave the project to Asianet chairman’s Hindustan Infrastructure Projects & Engineering, despite never having built a port before

Photo by Vikram Sharma/India Today Group/Getty Images
Photo by Vikram Sharma/India Today Group/Getty Images

Ashlin Mathew

BJP-backed Rajya Sabha MP and Asianet News Channel chairman Rajeev Chandrasekhar-helmed company Hindustan Infrastructure Projects & Engineering Pvt. Ltd’s (HIPEPL) proposal to develop and operate an all-weather port at Vijaydurg was approved in 2007 by the Maharashtra government despite the company having no prior experience in developing ports. There was no tender floated nor any competitive bidding process.

This port, which is located along the west coast about 50 km south of Ratnagiri, will handle will handle cargo for almost all industries located in the state’s industrial belt – Ahmednagar, Pune, Satara, Sangli and Sholapur. The port is to be developed at Burmana and Girye.

According to a report in LiveMint, the Maharashtra Maritime Board (MMB), which oversees development of ports by the state government, had issued a letter of intent then stating that the port will be developed on a BOOST (Built, Own, Operate, Share and Transfer) basis. The report had stated that the company will be allowed to operate the port for 50 years. Since Vijaydurg is owned by the Maharashtra government and being developed through private investment, the company can fix tariffs for services provided at the port. This would create a monopoly of services.

According to the Maharashtra government performance audit report by the Comptroller and Audit General in 2013, Rajeev Chandrasekhar’s HIPEPL was involved in mobile communication business (operating BPL Mobile till 2004-05) and then entered into the port sector by establishing HIPEPL in 2005-06. Evidently, HIPEPL lacked experience in port sector. More importantly, Chandrasekhar’s Jupiter Capital is the investor behind HIPEPL.

CAG report
CAG report
Page 31 of the CAG audit report, 2013

The report stated that HIPEPL did not submit the shareholding pattern within six months of signing of the agreement as stipulated in the agreement. The company had submitted the shareholding pattern only in August 2009 after MMB had issued the notice for termination of the agreement for the development of the port.

In the submission, HIPEPL had declared that 67.64 per cent of the shares to be held by a foreign company Gremach Infraproject Private Limited and 21.36 per cent by Hindustan Transport Infrastructure Ventures Private Limited (a subsidiary of HIPEPL).

The shareholding pattern was further revised in August 2010 with 63 per cent share to be held by Privilege Hitech Infrastructure Limited (in place of Gremach Infraproject Private Limited) which was approved by MMB in September 2010.

The CAG report states that the delay in taking action on the part of MMB, in spite of failure of Vijaydurg Ports Limited (VPL) to submit the share holding pattern in time, enabled the lead promoter to change the key promoters frequently. “MMB did not furnish any specific reply for not taking action to ensure that VPL finalised the shareholding pattern within the stipulated time.

CAG had reportedly questioned MMB’s delay in taking action against the company, but MMB did not furnish any specific reply for not taking action to ensure that VPL finalised the shareholding pattern within the stipulated time.

A project report (DPR) for development of Greenfield Port at Vijaydurg study prepared by HOWE India Private Limited for VPL states that the capital cost of Phase 1 development at Burmana site and Girye Site will be ₹109 crores and ₹976 crores respectively.

The CAG report states that the proposed period of completion and commencement of operations of the Vijaydurg port is March 2013. However, the work on the site is yet to be completed. The project costs have risen indelibly, even if we were to look only at the price rise of cement. It was ₹243 per 50 kg bag in 2009-10 and in 2017, it is ₹380. Maharashtra Maritime Board (MMB) chief executive officer Asheesh Sharma had in 2015 told DNA that work on Vijaydurg port had not progressed much.

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Published: 2 Dec 2017, 7:55 AM