The shipping ministry has allowed South Korea's Hyundai Engineering and Construction to bid for the US$285.62 channel-deepening project at Jawaharlal Nehru port, a move that will widen competition and possibly result in lower quotations, reported HNMint.

Three bidding groups comprising Dutch and Belgian firms were short-listed for the project. But "earlier this week, we received a communication from the shipping ministry directing us to qualify Hyundai and to invite fresh price bids for the work from all the pre-qualified bidders", a JN port official said, requesting anonymity because he is not authorised to speak to the media.

The shipping ministry consulted the law ministry and the central vigilance commission (CVC) before allowing Hyundai to qualify for the project, a ministry spokesman said. The opinion of the law ministry and CVC persuaded the shipping ministry to rule in favour of Hyundai, he said.

Hyundai could not be reached for comment immediately.

In March, the South Korean firm lodged a complaint with the shipping ministry contesting the state-owned port's decision to disqualify it from the auction. JN port disqualified Hyundai saying the dredger it had offered for the work did not meet the age norms specified in the tender.

The tender stipulated that dredgers executing the contract should not be older than 15 years. Dredgers are specialised ships used to deepen the channels of ports and harbours. The project cost was cleared by the cabinet committee on infrastructure at a meeting on 1 March.

A joint venture of Dredging International and Van Oord Dredging and Marine Contracting; Jan De Nul; and Royal Boskalis Westminster submitted bids to JN port on 24 February, a spokesperson for the port said.

After the cabinet cleared the project, JN port decided to open the price bids to select the entity to execute the contract. But this was called off following Hyundai's complaint.

The shipping ministry advised JN port to take into account the change in the calculation of Customs duty on dredgers as announced in the Union budget in March, which will effectively increase pricing.

JN port, India's busiest container port, has been struggling to implement the project, which is key to its capacity expansion plans, for the last six years.

The port is not deep enough at 11.5m and can accommodate ships with a capacity to load only up to 3,000 standard containers. It plans to deepen the channel to 14m to allow bigger ships to dock.

The project has been delayed by four years and is now slated to
be completed by 2014 instead of the earlier estimate of 2010 if an earlier auction had gone through.

The previous auction had to be scrapped in July 2008 because the lowest bid of $190.9 million for the work had exceeded the budget of $145.45 million.

The port, one of the 13 controlled by the Union government, handled 4.32 million standard containers in the year to March, accounting for more than half of the container cargo that passed through India's ports.