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The Cochin Port Trust (CPT) has begun tender proceedings for the construction of a new multi-user liquid terminal within the port-based Special Economic Zone at Puthuvypeen, which would be used for bunkering operations and to also handle imports of liquefied petroleum gas (LPG).

The port management has published a Request for Qualification (RFQ) document as a prelude to the Request for Pricing (RFP) process, which will be used as a means of short-listing the most suitable candidates to carry out the construction of the terminal. Interested parties will have until 14:00 hours on August 27th to submit their applications.

The Rs 184.22 Crore project will be awarded on a design, build, finance, operate and transfer (DBFOT) basis for a concession period of 30 years.

Once construction work has been completed, separate global tenders will be issued for the operation of the bunkering terminal.

The port has already carried out a feasibility study for the new bunkering terminal with the assistance of the Indian Ports Association. The import of LPG would be handled at the terminal of Indian Oil Corporation being set up at Puthuvypeen.

In the tender notice, Cochin Port Trust said one of the key drivers of the project was that "Cochin Port is located in close proximirty to international shipping routes, making it the ideal location for international bunkering business."

In addition, the terminal will have Special Economic Zone status, which will enable the port to import fuel without customs and other duties. The state government of Kerala has also already approved a special rate of only half percent VAT for the sale of marine fuel from the terminal, enabling bunkers to be sold at internationally competitive rates, the port said. The sale of bunker fuel to ships would effectively treated as export.

Bunkering of vessels has traditionally been expensive in India due to high taxes, which have pushed local prices higher than levels in other more competitively priced markets. The aim of the project will be to attract bunker buyers with the tax incentives that have been put in place.

Furthermore, new infrastructure projects at the Vallarpadam International Container Transshipment Terminal, LNG Terminal and LPG storage units are set to add to the demand for handling liquid cargo at the new terminal, the port said.

The port has appointed Feedback Ventures as the transaction advisor for the project.