Essar plans Rs 10,000 crore port in Gujarat

Eyes 50% growth in Vizag cargo in FY18 post modernisation; posted 25% growth in cargo in FY17

Essar Ports Ltd, a leading port operator in the country with a current capacity of 140 million tonnes per annum (mtpa), is planning to build a Rs 10,000 crore greenfield commercial port in Gujarat's Dwarka, a senior company official said. Besides, with its modernisation project at its Vishakhapatnam port likely to be completed by September, the company also expects 50 per cent growth in cargo from the port.

Rajiv Agarwal, CEO and managing director of Essar Ports Ltd confirmed that the company has signed a memorandum of understanding (MoU) with Gujarat Maritime Board (GMB) which administers and regulates the 41 state-owned non-major ports of Gujarat during the Vibrant Gujarat Summit in January this year.

"We have signed an MoU during the Vibrant Summit in this regard. Work on a detailed project report (DPR) is on. We are now working on approvals for the project, which might take some time," Agarwal told Business Standard. Investment of over Rs 10,000 crore is planned for the project which is estimated to employ around 1,000 people.

This would be Essar's first commercial port in India, as it currently operates ports which are largely for captive cargo. It currently operates five ports in the country in Hazira (Gujarat), Paradip (Odisha), Visakhapatnam (Andhra Pradesh), Salaya (Gujarat) and Vadinar (Gujarat).

In fact, Essar's port terminals recorded a 25 percent growth in cargo traffic in FY 2016-17. The consolidated cargo handling across the company's five operational ports rose to 72.86 million tonnes in FY 2016-17, compared to 58.27 million tonnes in the previous fiscal.

What is significant to note here is that third-party traffic grew by 60 per cent. Agarwal said that third party cargo is expected to go further up during FY18.
 

He added that with the modernisation work at Vishakhapatnam estimated to get over by September, the company expects to achieve a 50 per cent growth in cargo traffic there. "The present terminal is 25-year old. Post modernisation, Vishakhapatnam would be able to handle 7,500 tonnes per hour cargo (around 100,000 tonnes per day) and also handle 180,000 tonner capesize vehicle. From a 8 million tonne last fiscal, by conservative estimates, we expect it to handle around 12 million tonnes in FY18," Agarwal elaborated.

Meanwhile, during FY17, Essar's dry bulk cargo growth has been strong, registering a 52 per cent growth at 30.39 million tonnes (mt) as compared to 19.97 million tonnes in FY16. The anchor customer of Essar Ports' dry bulk terminals in Hazira, Paradip and Visakhapatnam is Essar Steel.

Agarwal said that with steel production in the country going up, the dry bulk cargo at the ports (mainly iron ore) has grown significantly.

The company is in the process to expand the 30 mt Hazira Bulk Terminal to 50 mt and also the 16 mt Vishakhapatnam terminal (which handles iron ore and pellets for Essar Steel NMDC and other major steel players) is being expanded to 32 mt. On the liquid cargo front, Essar's Vadinar terminal recorded a growth of 11 per cent and recorded a throughput of 42.47 mt in FY17.

As such Essar's 140 mtpa capacity is being expanded to 194 mtpa over the next few years.

Cargo Handling (in million tonnes)
	Q4 FY17	Q4 FY16	Growth	FY 2016-17	FY 2015-16	Growth
Dry & Unit cargo	7.51	6.70	12%	30.39	19.97	52%
Liquid cargo	10.62	10.56	1%	42.47	38.30	11%
Ports (consolidated)	18.13	17.26	5%	72.86	58.27	25%
Source: Essar Ports Ltd