Adani Group faces land hurdle for Dhamra port expansion

Dhamra Port Company is facing land roadblock to expand the port's capacity to 100 million tonne up from 25 million tonne at present, by adding 11 new berths

Adani Group controlled Dhamra Port Company Ltd (DPCL) is facing land roadblock to expand the port's capacity to 100 million tonne up from 25 million tonne at present, by adding 11 new berths.

DPCL needs 740 acres of land for the port expansion. But, the state government is dilly dallying on allotting it the land. The government has now decided to keep the process in abeyance.

"The state government's port policy has been challenged in the Odisha High Court and the matter is still sub-judice. The court had directed the government not to take any steps on the port projects for which memorandum of understanding (MoU) has been signed. Since then, the government has been dragging its feet over port development," said a government official.

"Though the high court (HC) order does not impact the Dhamra port, the government is acting cautiously. The land transfer to DPCL is kept in abeyance till the court disposes off the matter," he added.

In May, 2011, the HC directed the state government not to sign any further MoU or any concessionaire agreement with any port developer without the court's permission. The court's direction was in response to a public interest litigation (PIL) by environmentalist Biswajit Mohanty, questioning the morality of the state government in signing MoUs with the port developers. The petitioner's contention was that port developers should be selected on the basis of global bidding instead of the MoU route.

Non-transfer of land could hold up Dhamra port's expansion plan. The port has obtained environment clearance for the expansion.

"We are yet to get land from the state government for our proposed expansion. We are pursuing the matter constantly with the government," said a senior official of DPCL.

The expansion work involves increasing berth strength to 13 from two at present and upgrade cargo handling capacity four-fold.

Currently, the port, through its two fully mechanised berths, has a combined cargo handling capacity of 25 million tonne per annum (mtpa). The two berths are capable of handling 12 million tonne of imported dry bulk cargo and 13 million tonne of cargo for exports. The port commenced commercial operations in May 2011.

In May, 2014, Adani Ports & Special Economic Zone (APSEZ), part of the Adani Group, had acquired DPCL for Rs 5,500 crore.

Prior to the acquisition, DPCL was run as a 50:50 joint venture between Tata Steel and L&T Infrastructure Development Projects Ltd. In one of the biggest port sector deals in recent years, APSEZ has gained a foothold in the eastern coast.