V O Chidambaranar Port Authority has invited bids to build a 4 million twenty-foot equivalent units capacity container terminal in the port's outer harbour with an investment of Rs 7,055.95 crore, adopting viability gap funding as the sole criteria for awarding the 45-year deal, a first in the major port privatisation programme.

The port authority has sought bids based on the lowest VGT quoted by bidders for developing the project, marking a departure from the model followed so far by the Union government owned major ports wherein cargo handling contracts are finalised on the basis of the highest royalty per twenty-foot equivalent unit (TEU) or per ton cargo quoted by the bidders.

"The VGF shall constitute the sole criteria for evaluation of bids. The PRoject shall be awarded to the bidder quoting the lowest VGF," the port authority wrote in the tender documents.

The VGF has been capped at Rs 1,950 crore or actual quote, whichever is lower.

The construction period for Stage-I development is 36 months and Stage-II development is 24 months, with a cost of Rs 7,055.95 crore. The indicative project cost of Stage-I is Rs 4,494.46 crore and Stage-II is Rs 2,561.49 crore.