Adani Port To Become Operational Next Month

The Adani port in Gujarat will become commercially operational by early-March nine months after it achieved financial closure and one year after signing the concession pact with the Gujarat Maritime Board, official sources said here.

The Rs 340 crore project is promoted by Adani Exports Ltd on the basis of the build-own-operate-transfer (BOOT) format. The concession pact has been signed for 30 years from the date of commissioning.

The Adani port will be the second private sector port in the country after Gujarat Pipapav Port Ltd.

Sources said the port would have the capacity to handle about 3.5 million tonnes of cargo including one lakh kilo litres of liquid bulk cargo. In addition, it would also have a two kilometre long jetty with accompanying pipelines to enable discharge of petroleum and crude oil, the sources added.

 

The ports current draft the distance between the bottom of the vessel and the sea floor is about 12.5 metres. Accordingly, the port can offer docking facilities for vessels of over 40,000 dead weight tonnes.

Four vessels can simultaneously berth reducing vessel turnaround time, which is comparable to international standards. Vessel turnaround time is the period taken for a vessel to berth, discharge/load and resume voyage.

The project has been financed on a 60:40 debt-equity ratio. The promoters have brought in about 40 per cent of the equity upfront to ensure timely completion of the project. Sources said the term loans, having a tenor of 10 years, for the project were arranged by the Industrial Finance Corporation Ltd. The cost of the debt finance is estimated to be around 16 per cent, the sources added.

The projects estimated internal rate of return is about 18 per cent, while the equity rate of return is expected to be over 25 per cent.

Financial institutions were initially reluctant to sanction loans on the basis of assignability of the concession pact.

However, they ceded after the Gujarat government offered them a lien on the land and the jetty. The state government has, however, not extended any form of cash flow guarantees.

The project cost does not include the cost of developing the road and rail linkages connecting the port, as these will be developed by the state government and the ministry of railways respectively.