A district court at Gandhidham directed Kandla port to take over a container loading facility, which was developed by ABG Infralogistics, only after repaying the debt owed by the latter to a consortium led by Axis Bank.
The consortium is yet to recover about Rs 101 crore lent to ABG Infralogistics for developing the project. It may be recalled that earlier Kandla Port signed a 30-year concession agreement with ABG Infralogistics for the project.
On November 5, 2012, just six years into the contract, Kandla port issued a termination notice to ABG Kandla Container Terminal after the firm failed to fulfil a key obligation on handling the contractually mandated minimum guaranteed volumes at the terminal for the last three years beginning 2008, reports indicate.
Meanwhile, the court also directed ABG Infralogistics to keep paying royalty and lease rentals to the port until the latter repays dues to lenders and take over the project.
In August 2012, ABG stopped paying royalty and lease rentals to the port and the arrears on this count amount to Rs 12-15 crore. This will be the first instance of a Union government-owned port having to repay loans on a failed contract. Kandla, which will appeal against the order in the Ahmedabad high court, disputes the amount ABG has to repay banks.
In 2006, ABG Kandla Container Terminal had agreed to share 48.9 percent of its annual revenue every year with Kandla port to win the 30-year contract.
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