JM Baxi Ports and Logistics Pvt Ltd and M Dinshaw & Co Pvt Ltd are set to win the rights separately to run a cluster of 10 and 12 cargo berths, respectively, at the Indira Dock of Mumbai Port for 15 years in the biggest asset monetisation deal finalised by a state-owned port authority on an Operation and Maintenance (O&M) model.

JM Baxi Ports and Logistics Pvt Ltd, one of India's biggest private port operators, placed the highest royalty price bid of ?153.44 per ton for the cluster comprising 10 berths. JM Baxi is 50 per cent owned by Hapag-Lloyd AG, the world's fifth-largest container shipping line.

M Dinshaw & Co Pvt Ltd, a stevedoring firm operating at Mumbai Port, quoted ?217 per ton as royalty for the cluster involving 12 berths when bids were opened on 7 April, multiple sources said.

Cluster 1 comprises BPX, BPS, ID HWB berths 18 to 21 & 23, Berth Nos 1, 2 and 3 of ID basin (10 berths), while Cluster 2 consists of Jetty End, 10, 11, 12, 12A, 12B, 13A, 13B,14, 15, 16 (12 berths) in ID basin.

With this initiative, M Angamuthu, Chairman of the Mumbai Port Authority, is replicating the O&M model he successfully implemented at Visakhapatnam Port Authority, another state-owned port, during his tenure at the eastern coast port. Angamuthu was moved to the Mumbai Port Authority in September 2025, but continues to hold the additional charge of Chairman, Visakhapatnam Port Authority.

O&M model revives stalled privatisation push

Among the dozen major ports (Union Government-owned), Mumbai Port Authority hasn't succeeded in privatising cargo terminals through the Public-Private-Partnership (PPP) mode, with a lone project awarded in 2007 to set up an offshore container terminal ending in a fiasco.

Chairman Angamuthu has succeeded in changing that track record.

"For the first time, something special and good is happening for Mumbai Port. The O&M model will enhance effective utilisation of assets, which, otherwise, were sub-optimally utilised, and the successful private operators will bring compatible business and better optimise usage of berths," Angamuthu told ET Infra.

"We will focus on clean cargo such as automobiles, construction materials, project and service cargo in future," he added.

The privatisation of the berths at Indira Dock is aimed at checking the slide in cargo handled over the last three years at the port's largest dock, capable of handling deep draft vessels.

Labour constraints drive outsourcing

The port's labour strength has reduced drastically, and the port authority is unable to supply labour gangs for stevedoring to the vessels berthed. Ships depend on Custom House Agents (CHAs) for deploying labour.

Labour output has also declined due to an ageing workforce. Considering all this, the Mumbai Port Authority decided to outsource stevedoring, loading, unloading, and transportation activities under an O&M model.

In January, the Mumbai Port Authority called bids in two parts, with potential bidders given the option to quote for either or both. The bidder quoting the highest royalty in the individual parts will win the deal. If a single bidder offers the highest royalty for both parts, the contract will be awarded to that bidder, the port authority wrote in the tender documents.

JM Baxí Ports and Logistics, and M Dinshaw & Co emerged as the highest bidders for individual clusters.

Revenue-linked royalty structure

The private O&M operators of the berths will earn revenue through stevedoring charges, storage charges for the area within the project site, demurrage, transportation charges from berths to the yard and vice versa and loading charges for delivery.

The O&M operators are free to set rates to be collected from the users based on market conditions. However, the rates should not exceed the Scale of Rates (SoR) set by the Mumbai Port Authority for stevedoring and storage charges at Indira Dock. 

They will pay the contractually mandated royalty per ton of cargo to the port authority from the revenue earned during the ten-year contract, which can be extended by five years. The royalty payable will be revised annually based on the Wholesale Price Index, a measure of costs.

The O&M operator will be liable to achieve a minimum guaranteed throughput (MGT) written into the contract, which also provides incentives for handling more cargo.

The O&M operators have the option to procure, hire, or lease cargo-handling equipment that is no more than 10 years old.

The wharfage and vessel-related charges levied on ships calling at the berths will continue to accrue directly to the port authority.

Mumbai Port Authority had previously attempted to privatise berths in the Indira Dock basin on a PPP basis for 30 years. Between 2012 and 2014, it offered four berths multiple times and once in 2014 for Indira Dock Harbour Wall Berths. But the exercise proved futile.

In 2024, the port authority again attempted to privatise three Harbour Wall Berths in the Indira Dock basin through a PPP, but received only a single bid.

Private firms cited cargo uncertainty after 10 years at the city-based port, ageing infrastructure, and competition from nearby ports as reasons for their reluctance to invest in a 30-year PPP project.

Hence, the port authority discharged the tender and, with the Board's approval, decided to monetise the berths at Indira Dock basin on an O&M model for 15 years.

Source: ET Infra. Com 

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