Mangalore port stake in SEZ

New Mangalore Port Trust (NMPT), which operates India's ninth largest major port in Mangalore on the west coast, has evinced interest in picking up around 10 per cent stake in the Mangalore Special Economic Zone Limited (MSEZ) in an effort to become a partner in the project.

MSEZ is a special purpose vehicle floated by Oil and Natural Gas Corporation (ONGC), Karnataka government through Karnataka Industrial Area Development Board, Infrastructure Leasing and Financial Services and Kanara Chamber of Commerce and Industry (KCCI) to develop a multi-product SEZ at Mangalore.

MSEZ Limited has an equity capital of Rs 50 crore. While, ONGC has 26 per cent stake in the project, KIADB has 23 per cent, IL&FS holds 49 per cent and the remaining 2 per cent is held by KCCI.

Said I S N Prasad, managing director and CEO, MSEZ Ltd, "NMPT approached us recently and expressed interest in picking up stake in MSEZ. Among the existing equity holders, KIADB, which holds 23 per cent stake, has agreed to divest 10 per cent of their stake to NMPT. While, there is no objection by other equity holders in the company, NMPT needs to take an approval from the Union ministry of shipping."

He said NMPT has already received an in-principle approval by the Union Ministry of Shipping. However, the ministry has asked NMPT to furnish the details of the project and the exact involvement of NMPT in the SEZ before giving the final approval.

"Once the ministry gives its final consent, the proposal will be placed before the Union cabinet for further approval. The whole exercise is expected to be completed very soon," he told Business Standard.

Prasad said NMPT has in its possession around 300 acres of unused land which will be leased out to MSEZ as part of its proposal to be a partner in the SEZ project. MSEZ Limited will use this land to attract shipping related businesses in consultation with the board of NMPT.

Mangalore SEZ project is the first such project being developed on the coastline of Karnataka, wherein it is expected that at least Rs 50,000 crore will be invested in the next five years. The project is being developed in an area of 4,000 acres, of which already 1,900 acres have been acquired, he said.

Presently, 450 acres land has been allotted to Mangalore Petrochemicals Ltd, an ONGC company which is setting up a Rs 6,000 crore aromatic complex.

Another 85 acres land has been given to Indian Strategic Petroleum Reserves, an ONGC company, for building an underground reservoir for storing crude oil at an investment of Rs 1,500 crore, Prasad added.