The Board is likely to firm up its views on the terms of contract including royalty, dredging, road and rail links to Vallarpadam Island. These will be entered into with P&O Ports India which was the sole bidder for the development of the Vallapadam Transhipment terminal, they said.

Cochin Port trustee, who met in Cochin last week, were indecisive on issues of price to be paid by the bidder and the payment schedule and sought a full board meeting with P&O Ports to sort out contentious issues of rail connectivity to the island and transfer date of Vallarpadam Load Centre (VLC), sources said. (PTI) P&O Ports has vehemently objected to the Cochin Port Trust's insistence on the private developer for chipping in the cost of providing rail link to the Vallarpadam island.

"We were never required by the bid to develop a rail link to VLC. In our technical bid submission we had said that for VLC to succeed CoPT must convince the ministry of railways to provide a rail link which is vital to develop Vallarpadam as a National Load Centre," P&O Ports India managing director Capt Jimmy Sarbh said.

The meeting on September seven is likely to discuss this and the issue of transfer of container traffic from Cochin Port to the VLC in three years time, a clause P&O Ports finds uneconomical, official sources said.

Vallarpadam transhipment terminal project is to be developed on a joint venture basis with Cochin Port Trust holding 26 per cent equity AND the rest being held by P&O Ports India.

A special purpose vehicle (SPV) would be formed to implement the project and existing facilities at the Rajiv Gandhi Container Terminal would be taken over by the SPV, sources said.

In the first phase, Rajiv Gandhi Container Terminal at Cochin Port would be upgraded to handle growing hinterland business and entire container traffic would be shifted to the new terminal at Vallarpadam Island in three years time, Sarbh said.

He however objected to the "date driven" shift to VLC instead of being value driven. "It may not be possible to get non-recourse finance from bankers for the development of Vallarpadam as the shift to VLC is date driven (uneconomical) instead of being value driven," he added.

While dredging of the approach channel and development of supporting infrastructure was the responsibility of Port, P&O Ports is unwilling to fund any of these, sources said.

Capital dredging of the approach channel is likely to cost Rs. 300 crore and rail connectivity and power would cost another Rs. 100 crore, expenses which P&O Ports has declined to share, they said.

There are also differences on Rs. 300 crore bid price fixed by project consultant SBI Capital Markets and Thursday's meeting was likely to deliberate on the issue, sources added.