The Orissa cabinet has endorsed the proposal of Singapore-based International Seaports Ltd to set up a port at Dhamra. The cabinets nod has paved the way for the signing of the agreement between the company and the state government.
Some quarters had opposed the proposal on the grounds that the foreign promoters had been selected through the MoU route instead of the more transparent bidding route.
Earlier, during Chief Minister J B Patnaiks investment scouting mission to South-east Asian countries last year, the state government had entered into an MoU with the Singapore-based company. International Seaports is a joint venture between Stevedoring Services of the US, Precious Shipping Co of Thailand and Larsen and Toubro.
The cabinet also approved the proposal to provide state guarantee for loans taken by Neelachal Ispat Nigam for its Rs 1,510 1.1 million tonne steel plant at Duburi in Orissa. Neelachal Ispat is a joint venture between the state government and public sector Metals and Minerals Trading Corporation (MMTC).
Lead institution IDBI had asked Neelachal for guarantees as a pre-condition to sanctioning loans. The state government and the MMTC will pick up equity worth Rs 100 crore and Rs 73 crore respectively in the project.
The agreement that the company will sign with the state government will outline the terms and conditions.
According to the draft agreement, the port will come up over a 30 sq km island called Kanika Sands off the Dhamra coast in Balasore district. The port is the third in the state after Paradeep and Gopalpur.
The first phase of the project envisages traffic handling of about eight to ten million tonnes and is estimated to cost about Rs 1,200 crore. The project also includes the construction of a 62 km road and rail network connecting the port with Bhadrak, the nearest town, at a cost of Rs 300 crore.
The project will be implemented on a build-own-operate-share-and-transfer (BOOST) basis. Though the state government will not pick up any stake in the project, it will claim a share of 5 per cent on the ports turnover.
The port will remain under private management for 30 years before being transferred to the state. Chief secretary S B Mishra said the state governments share of revenue from the port operations is pegged at Rs 13-26 crore in the first five years, Rs 23-50 crore in years 5-10, Rs 33-75 crore in years 10-15, Rs 43-99 crore in years 15-20 and Rs 53-123 crore in years 20-25.
Mishra said the promoters have assured that the port will become operational by April, 2001. The port will have a draught depth of 60 feet and is expected to accommodate cape size vessels of 1,50,000 DWT.
The port, which will initially handle bulk cargo, will mainly cater to the needs of Orissa, Bihar, eastern Madhya Pradesh and eastern Uttar Pradesh.
International Seaports has also evinced interest in setting up an industrial park at Dhamra over an area of 5,000 acres at a cost of Rs 2,000 crore.
