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Defence ministry nod to ease Tata Steel's Subarnarekha port acquisition

The project proposed at Subarnarekha needs 1,215.43 acres of land for the port area

Jayajit Dash  |  Bhubaneswar 

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The Defence ministry is on the verge of granting conditional approval for development of the off the coast of north The nod is expected to overcome a major hurdle for that has announced to acquire a majority stake in the project. The steel maker has signed a definitive agreement with Chennai-based Creative Development Ltd (CDPL) to pick up 51 per cent equity in the project from the original promoters.

“The Defence ministry, particularly the (DRDO) had been opposing many minor projects along the coast of north The identified sites were close to their missile testing facility near Chandipur. For the port, the Indian Air Force had certain objections as their practice limit zone fell under the limits. But, after discussions with the defence ministry officials, the row is almost settled and we are awaiting a formal approval”, said an government officer.

Defence secretary Sanjay Mitra had negotiated with the chief secretary to settle the issue. Padhi is understood to have suggested a formula where the operations of the Air Force and the project can go hand in hand. Later, Padhi followed it up with a meeting in New Delhi to clinch the deal in favour of Odisha's sector development.

CPDPL, promoted by two technical entrepreneurs, and Ramaswamy Rangarajan, had entered into a concession agreement with the government in January 2008 to develop the as an all-weather deep-draft facility.

The project proposed at needs 1,215.43 acres of land for the area and 1,565.93 acres for the rail corridor. Out of 1,215.43 acres of land needed for the area, 158 acres constitute Gochar land, 193 acres Bhudan land, 138 acres of encroached land and the remaining 724 acres being free land.

The original cost of developing the project was pegged at Rs 2,345 crore but an assessment by the state government shows that the revised cost could go up to Rs 4000 crore.

For Tata Steel, the is expected to address its strategic needs in the future. Besides, its strategic location makes the attractive to structurally enhance the competitive position of Tata Steel's India operations, especially its greenfield Kalinganagar project in The steel maker, however, has stated previously that the acquisition and development is subject to certain conditions precedent, detailed technical assessments and financial closure.

First Published: Sat, August 12 2017. 22:17 IST