Orissa to vet concession pact with DPCL

Amid growing speculation of a possible stake sale in Dhamara Port Company Ltd (DPCL) by its two promoters- Tata Steel and L&T, the state commerce & transport department has decided to vet the concession agreement signed with DPCL to check any violation of the conditions of the pact.

"Till now, the promoters of Dhamara port have not informed us anything regarding stake sale. But, we have decided to examine the concession agreement signed with the developer”, said G Mathivathanan, secretary (commerce & transport).

Another commerce & transport department official said, “According to the concession agreement signed by the state government with developers of non-major ports, the original promoters have to retain at least 51 per cent stake till the port begins operations. In case of DPCL, the combined equity of the promoters stood at 100 per cent when the port commenced operations. In any case, the pact signed with DPCL will be reviewed.”

 

A top DPCL executive on condition of anonymity said, “The stake sale matter is not in my knowledge. The promoters will announce it an appropriate time if there is any such plan.”

While L&T is keen to offload its entire 50 per cent stake in the venture, Tata Steel intends to bring down its equity from 50 per cent to 26 per cent. Adani Ports and Special Economic Zone Ltd, the operator of India’s biggest private port at Mundra in Gujarat was in the race for picking up a majority stake in DPCL for gaining a toehold in the eastern coast.

L&T which has invested in Dhamara Port through its fully owned subsidiary- Infrastructure Development Projects Ltd (IDPL), has identified this property as a non-core asset. The engineering & construction giant aims to complete the stake sale process in the current fiscal itself.

JSW Infrastructure, a Sajjan Jindal Group company, was also interested to acquire stake in DPCL, but pulled out of the race after a detailed diligence.

DPCL has been running commercial operations since May 2011 and has handled cargo traffic of 8.5 million tonne till mid-August 2012.

The promoters have invested Rs 3500 crore in the first phase. Second phase expansion is yet to take off for want of environment clearance.

The port was formally inaugurated in December last year and is considered to be one of the deepest sea ports in the country with a draught of 17.5 metres.

The port is capable of handling Capesize vessels up to 180,000 dead weight tonnage (dwt).

The Dhamara port master plan provides for 13 berths capable of handling more than 100 million tonnes of dry bulk, break bulk and containerised cargo.