Ennore Port, on the outskirts of Chennai, the only major one in the country under a corporate form of management, is working towards converting its existing six million tonne iron ore berth into one for coal. It expects to come up with a clearer plan on this by May.
“It is possible to convert an iron ore berth into a coal berth but there are some issues like the concession agreement. The process is on and it is being worked out. By May, we should be able to come up with the solution,” Chairman and Managing Director M A Bhaskarachar told Business Standard on Monday.
Adding: “There is not much hope for iron ore (shipments, given the various legal clamps on its mining and sale), so we are looking at converting the berth to cater to thermal coal, where demand is expected to increase in coming months.”
Conversion from iron ore to coal alone will call for an investment of Rs 150 crore but it is still to be decided if Ennore Port will bear the cost or it would be done by the operator, said Bhaskarachar.
The port has a capacity of 30 million tonnes, of which six mt for iron ore has been idle for a couple of years, owing to the several issues regarding mining in the country. The balance 24 mt is being completely utilised -- it handles thermal coal, cars and petroleum liquids. The port is confident of meeting the 24 mt traffic target it set for the current financial year and is aiming for annual traffic of 27 mt in 2014-15 (April-March).
“The incremental three mt will be a combination of cars, POL (petroleum, oils and lubricants) and thermal coal,” said Bhaskarachar. “Of this, two mt will be contributed by thermal coal and the balance will be cars and POL together.”
Adding: “We have given a very good contribution among all the ports and the ministry (of shipping) is very happy with Ennore’s contribution.”
Next year, however, Ennore Port will be focusing on linkages and not on development of berths, said Bhaskarachar. “Road and rail connectivity, development of land for storage of cargo and some port-associated facilities is something we will look into next year. We will spend around 250 crore for all this. There will be no direct capacity addition. There will be an enhancement at the associated facilities.”
On the Coromandel coast about 24 km north of Chennai Port, the Centre holds 68 per cent stake in Ennore; the rest is held by the Chennai Port Trust.
Ennore Port to raise Rs 500 cr via bonds
Ennore Port will launch tax-free secured, redeemable non-convertible bonds of face value of Rs 1,000 apiece on Tuesday. The bond issue aggregates to Rs 250 crore, with an option to retain over-subscription up to Rs 250 crore. The bonds are proposed to be listed on the BSE. The funds raised will be primarily used for dredging projects, augmenting rail and road connectivity to the port and building a third coal berth for Tamil Nadu Generation and Distribution Corporation.