Tata Steel not exiting Dhamra Port Company: Nerurkar

It's joint venture partner, L&T had said it is looking to find a buyer for its stake in DPCL

Tata Steel today ruled out any immediate plans to exit from Dhamra port in Odisha, even as its joint venture partner Larsen and Toubro (L&T) is looking for buyers to offload its 50% stake.

"No," said Tata Steel's Managing Director H M Nerurkar to a query on whether the company is looking to exit the venture in which it has a 50% stake.

"L&T is doing it first. We are where we are. They (L&T) are trying to do something. Our Board has not yet made up its mind, we have not yet taken it up," he told reporters here on the sidelines of International Mineral Processing Congress.

Meanwhile, L&T spokesperson refused to comment on the matter and said, "as a matter of policy, our company does not confirm or deny market speculation."

At a recent AGM, L&T Chairman had said the company has identified Dhamra Port Company Ltd (DPCL) as a non-core asset and is looking to find a buyer by the end of this fiscal.

The port is strategic for Tata Steel and can be used as a gateway of transferring raw materials and finished products from its upcoming 6 MT steel plant in Kalinganagar, Odisha.

DPCL has been awarded a concession by Odisha government to build and operate a port on Dhamra river in Bhadrak district on BOOST (Build, Own, Operate, Share and Transfer) basis for a total period of 34 years, including a period of 4 years for construction.

The company, which commenced operations in May last year, had suffered Rs 458 crore loss in first year of operations, largely due to high interest cost and amortisation.

DPCL, which can handle about 25 million tonne cargo of various types of coal, limestone and iron ore, had handled 5.1 million tonne total cargo last fiscal.

According to Tata Steel's annual report for 2011-12, the two promoters of DPCL (Tata Steel and L&T) have pledged their 51% stake with IDBI Trusteeship Services. The financial details of the pledge has not been disclosed though.

Located between two major ports, Haldia and Paradip, DPCL is one of the deepest ports of India with a depth of 18 metres, which can accommodate super cape-size vessels up to 1,80,000 DWT.

The immediate hinterland of Dhamra port -- Odisha, Jharkhand and West Bengal -- is rich in mineral resources with reserves of iron ore, thermal coal, nickel, bauxite and chromite, all of which have brisk export demand.