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Port development likely to suffer

Dillip Satapathy  |  Kolkata/ Bhubaneswar 

The Orissa government’s bid to promote over a dozen ports along its 480 km coastline is likely to suffer setback due to grant of exclusive waterfront right to a few private port developers.

The Orissa government, as on date, has given this exclusive right to three port developers, namely Gopalpur Port Ltd (GPL), Dhamra Port Company (DPCL), and Creative Port Private Ltd (developers for Kirtania port), with whom it has signed MoUs.

As per this concession, no other private party can develop a port within 50 km on either side of the Gopalpur port and 25 Km on either side of Dhamra port and Kirtania port each.

This clause along with reluctance of Defence Research and Development Organisation (DRDO) to allow any new port north of Dhamra for strategic reasons threaten to derail establishment of most of the new ports in the state.

It may be noted that the Orissa government, basing on a study conducted by IIT Chennai, had identified 13 locations along the state’s coast line suitable for setting up of ports.

To facilitate this objective with help of private participation, the state government had formulated a separate port policy in 2004.

After invitation of expression of interest from different parties, the state government had selected 13 promoters to develop new port sites.

But the government has undermined its efforts by granting exclusive waterfront rights to three companies which has proved to be a major stumbling block in the way of establishment of other port projects.

The port sites coming within the Gopalpur port’s 50 km radius exclusive zone are Palur and Bahuda.

Similarly, other port locations to be affected by the exclusive waterfront rights given to Dhamra Port Company and Creative Port Private Ltd are Inchuri, Chudamani, Bahabalpur and Chandipur.

As per the exclusive rights clause, the developers of Gopalpur, Dhamra and Kirtania have the first right of refusal for any new port site falling within their exclusive zones.

Now, with these three companies not willing to forego their claim on the port sites within their respective exclusive zone, the state government is finding it increasingly difficult to allot the sites to another developer to construct a new port.

For example, the state government had asked the Gopalpur Port Ltd to exercise its right of first refusal for the Bahuda port site, 24 km south of Gopalpur, which it wanted to hand over to Hyderabad based Maytas Infra Ltd for construction of a new port.

But GPL turned down the state government proposal saying it is keen to develop the site itself. Similarly, the Essel Mining & Industries, which proposed to set up a port at Chudamani, 14 km north of Dhamra port, is unable to progress with its work due to objections by DPCL.

Meanwhile, to circumvent the problem, some developers propose to convert their commercial port ventures into captive port projects as the exclusive right clause is not applicable for captive ports. This is why, Chennai based MARG which proposed to set up a Rs 1050 crore port at Palur, 9 km north of Gopalpur, has converted its project into a captive venture for its Rs 6,550 crore ship building and repairing unit to come up at the location.

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First Published: Tue, December 30 2008. 00:00 IST