Vedanta, Essar vie for Rs 845-cr project at Vizag Port

Project involves upgradation of existing terminal and creation of new facility with total outlay of nearly Rs 845 cr

Industrial majors Vedanta and Essar Groups are in the race to get the Rs 845 crore worth Ore Handling Complex (OHC) project at Visakhapatnam Port, a senior official of the port Said.

The OHC project would be awarded on design, build, finance, operate and transfer (DBFOT) basis once the necessary approvals come from various government agencies, the official said.

According to the official, the project involves upgradation of the existing terminal and also creation of a new facility with a total outlay of nearly Rs 845 crore, including Rs 170 crore upfront fee to the port.

"The Planning Commission had given its consent for the project in February. We have sent the proposal to the Ministry of Shipping and from there it will go to the Cabinet Committee on Economic Affairs.

"We will have to get security clearances from the Ministry of Home Affairs also. We have Vedanta and Essar as the bidders. It will take two to three months to award the 30 year-contract to the bid winner," the official told PTI.

Currently, the existing Iron Handling capacity of the port is at 12 million tonnes and with the expansion it may go up to 23 tonnes, the official added.

The Shipping Ministry had set a target of 70 million tonnes for Vizag port for all commodities in 2012-13. The port lost about 7.1 million tonnes cargo mainly on two commodities -iron ore and petroleum products.

It handled 12.24 million tonnes of iron ore and 15.08 million tonnes petroleum products against 16.07 million tonnes and 18.40 million tonnes, respectively, in the previous year.

Due to ban on mining in some parts of the country and also drop in iron ore exports, the ore movement from the port has also gone down, the official added.

The port official said as part of Maritime Agenda-2020, the Ministry of Shipping needs to change all the major ports into landlord ports.

"We have got CCEA clearance for Container Handling Facility under PPP model. However, we are yet to get the MHA clearance for that. Once it comes we will award the contract," the official added when asked about the other projects that are taken up on PPP model.

The capacity of port of Visakhapatnam is 67.33 million tonnes as on March 31, 2013 and the envisaged capacity is 140 million tonnes and 149 million tonnes by 2016-17 and 2019-20, respectively.

The investment proposed for various capacity enhancement schemes is Rs 13,940 crore of which about Rs 7,100 crore is proposed to be funded through PPP mode in three phases, a senior official of the Port said.