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Officials hit back at DP World over port audit refusal

DP World on the defensive as decision to turn down port audit in India provokes backlash
DP World on the defensive as decision to turn down port audit in India provokes backlash
DP World on the defensive as decision to turn down port audit in India provokes backlash

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RELATED: Indian Shipping Ministry seeks audit of DP World's container terminal

DP World has turned down the Shipping Ministry’s request to have a performance audit carried out on the Vallarpadam terminal by the Comptroller and Auditor General (CAG).

The UAE-based port operator, one of the top five largest in the world, said in a release that it is not liable to be audited by the CAG, as such provision was not included in the licence agreement.

The operator’s agreement to an audit is mandatory as the terminal project is a PPP joint venture. However, a senior port official told Indian media that they have forwarded the letter to the Shipping Ministry for clarification.

“We are also examining an earlier case where there is a Supreme Court verdict allowing the CAG to audit a PPP project,” he said.

The under-performance of the terminal, at 35% of its capacity since its commissioning in 2011, has prompted at least one politician to take up the matter in the upper house of parliament.

There were also demands from various quarters on whether the licence agreement with the terminal operator should be renewed, according to Business Line.

KVA Iyer, VP, Cochin Port Labour Union, said DP World’s consent for a performance audit is not legally mandatory as the Supreme Court had upheld the right of the CAG to audit accounts of PPP project where revenue is shared with the state.

Iyer said an audit is necessary as DP World has failed to fulfil its assigned task of turning Kochi into a container hub, first at Rajiv Gandhi Container Terminal and later at Vallarpadam terminal.

DP World has hit back at the allegations of under-performance, pointing out that three major factors were undermining the container terminal’s performance.

These include the delay in getting relaxation of India’s Cabotage Law, non-completion of the national highway connectivity for evacuation of the port and failure to achieve 14.5m draft alongside for mainliners.

RELATED: DP World driving expansion at Indian port

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