Tata Steel will develop the port on the Subarnarekha river's mouth in four to five years, a top company executive said in Bhubaneswar.
"We hope that in the next few months, all issues will be ironed out and then we can start work on the (Subarnarekha) port project. Tata Steel will complete the port development in the next four to five years. We have 51 per cent ownership in the company that has a concession agreement for developing the port. Our investments on the port could run into Rs 2,000-3,000 crore," said T V Narendran, global chief executive officer and managing director of Tata Steel.
He said that the port has got a lot of potential and could emerge as an important port not just for Odisha but for Jharkhand and West Bengal, too. The port would be able to handle at least 25 million tonnes of cargo annually, he said.
Strategically, Narendran feels that the Subarnarekha port has the potential to turn out to be the best port for Tata Steel's Jamshedpur steel mill. "We have been servicing the Jamshedpur steel plant from the ports at Paradip and Dhamra. But we believe Subarnarekha will be the best port for servicing Jamshedpur," he added.
Top officials of Tata Steel have had negotiations with the Odisha government on the status and roadmap ahead of the Subarnarekha port.
Odisha's chief secretary Aditya Padhi said, "We have handed over 692 acres land for developing the Subarnarekha port. An additional 150 acres, including a mix of government and private land, is pending for transfer. Once the port authorities get the access road spread over 27 acres, they can commence work."
Padhi said that Chief Minister Naveen Patnaik would lay the foundation stone for the Subarnarekha port on February 13. He estimated the project cost at Rs 5,000 crore.
Tata Steel, in January 2017, had inked a definitive agreement with Chennai-based Creative Port Development Ltd (CPDPL) to pick up 51 per cent equity in the port project from the original promoters.
The Subarnarekha river mouth is envisaged to be developed as a commercial port on the build, own, operate, share and transfer (BOOST) model. The port development is envisaged through a wholly-owned subsidiary, Subarnarekha Port Pvt Ltd (SPPL).
CPDPL, promoted by two technical entrepreneurs, Ramani Ramaswamy and Ramaswamy Rangarajan, had entered into a concession agreement with the Odisha government in January 2008 to develop the Subarnarekha port in Balasore district as an all-weather deep-draft facility.
According to the concession agreement signed originally, the port would have an initial capacity of 10 million tonnes per annum (mtpa), which was to be scaled up to 40 mtpa in 10 years. As per this agreement, the port developer would share revenue with the state government at the rate of five per cent from first to the fifth year, eight per cent from sixth to 10th year, 10 per cent from 11th to 15th year and 12 per cent for the remaining 15 years.