Kamarajar Port inks MoU with IOC, Adani

IOC will invest Rs 4,512 cr in LNG project, while Adani will invest Rs 1,270 cr in container terminal

Kamarajar Port Ltd, earlier known as Ennore Port Ltd, has signed agreements with Indian Oil Corporation Ltd, and Adani Ports and SEZ Ltd. The two companies have committed investments to the tune of Rs 5,782 crore, on the two different projects.

The port plans to increase its capacity from the present 30 mtpa (million tonne per annum) to around 67 mtpa by the end of the 12th Plan (2012-2017) and will require around Rs 9,000 crore of investment. The signing of the agreements is part of the capacity enhancement of the project, said G K Vasan, Union Minister of Shipping.

The minister was speaking on the sidelines of an event where the port signed agreements with IOC, Adani Ports and with the salt department to procure land.

IOCL signed an MoU to invest Rs 4,512 crore in setting up an LNG terminal. Adani Ports signed a concession agreement to set up a container terminal at an estimated cost of Rs 1,270 crore.

Earlier, the port had signed agreements including converting coal berth No 3 to ITD Cementation India Ltd at an estimated cost of Rs 199 crore and a multi-cargo terminal by Chettinad Builders and SICL at a cost of Rs 151 crore. Cumulative investments from these projects would be Rs 6,132 crore.

A few more projects are also in the pipeline. Of the Rs 9,000 crore investment, around Rs 1,000 crore will be invested by Kamarajar Port, said N Muruganandam, Joint Secretary (Ports), Ministry of Shipping.

A K Marchanda, executive director, I/C (Gas), Indian Oil Corporation, said IOC’s LNG project will cater to all the southern states and it will be ready in the next 3-3.5 years. He added the project had secured environment clearance and would cater to industries and households. The company is setting up a 5- mtpa LNG Terminal.

Vasant R Murthy, chief executive officer, container ports and logistics, Adani Ports and SEZ Ltd, said, construction of the container terminal project will start in the next six months and operations will start in 20 months from the commencement of construction of the terminal.

The company has floated a special purpose vehicle named Adani Ennore Container Terminal Pvt Ltd and the entire project will be funded through debt and internal accruals. Construction cost of the project is estimated to be around Rs 1,270 crore.

Adani Ports emerged as the highest bidder to build a container terminal inside the port. The other companies that had shown interest included DP World which was the runner-up. Third company, Singapore Port Authority did not participate in the final financial bid.

Adani offered a revenue share of 37 per cent, beating DP World, which offered 27 per cent. The official said, in all 11 companies had shown interest in the technical bid. However, only three companies offered to make a financial bid.

The Kamarajar Port also purchased 647.8 acres belonging to the salt department of the Centre.