Odisha govt is set to sign fresh concession pact for Gopalpur Ports Ltd

The Odisha government is set to sign a revised concession agreement with the authorities of Gopalpur Ports Ltd (GPL).

The modified pact would formally approve the change in shareholding structure of the special purpose vehicle GPL. Shapoorji Pallonji (SP) Group is acquiring controlling stake in GPL while the original promoter- Orissa Stevedores Ltd (OSL) keeps the balance stake. SP Group’s stake in GPL would be at least 51 per cent, it can even go the extent of 60 per cent. Two shareholders who initially had stakes in GPL- Hong Kong based Noble Group and Delhi-based metals trader Sara International Ltd have walked out of the consortium formed to develop Gopalpur, a seasonal port off the coast of southern Odisha into an all-weather port.

“The terms of the revised concession agreement would broadly remain the same as in the original agreement. We are looking to sign the new agreement for Gopalpur port anytime soon after the law department’s scrutiny and final approval from the government. The port authorities have committed to commission two new berths by June 2019”, said an official source.

The addition of two new berths would ramp up Gopalpur port’s cargo handling capacity to 20 million tonnes per annum (mtpa). This phase expansion would cost Rs 20 billion. The berths are being designed to handle bulk commodities - iron ore, coal, cement, steel and limestone. The proposed investments to be financed through the Group's internal accruals and some project financing is also meant to put up a new breakwater facility at the port site and increase the scale of mechanisation. Presently, Gopalpur port has one multi-purpose berth with a capacity to handle 3.5 mtpa of bulk cargo.

The port's development work has suffered due to change in ownership structure and dithering by the original promoters to fund the expansion plan. The port development work was originally awarded in 2008 to GPL, consortium promoted by OSL, Sara International and Hong Kong based Noble Group. It was to be developed as an all-weather port on BOOST (build, own, operate, share and transfer) basis. Later, Noble Group exited the consortium in 2010. Sara International remained almost a quiet equity participant without showing serious intent to contribute to the port's funding. Jindal Steel & Power Ltd (JSPL) made an unsuccessful bid to acquire Sara International's stake but the deal failed.

The port's operations were also battered by two back to back tropical cyclones- Phailin and Hud Hud in 2013 and 2014 respectively. After repair work, the port resumed normal commercial operations in December 2015 and graduated to full scale operations in April 2016.

Ilmenite, a rare earth mineral and industrial salt constitutes the bulk of the cargo volume. The port caters to industries like Indian Rare Earths Ltd (IREL), Jayashree Chemicals and Indian Farmers Fertiliser Cooperative Ltd (Iffco).