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Essar entry to boost iron ore exports

The entry of Essar Ports Ltd, one of the largest private port companies in India with a capacity of over 100 million tonnes a year, as a BOT operator in Visakhapatnam Port will not only boost iron ore exports but also give a fillip to coastal movement in India.

Besides tapping coastal movement within the country, Essar will explore markets in China, Korea, and Japan. The project will mechanise and augment facilities, including significant improvement in the efficiency of the Ore Handling Complex built in 1976.

The project is envisaged to have iron ore handling at 8,000 tonnes per hour — the highest in India and handle Super Cape size vessels (200,000 DWT) in the outer harbour and Panamax vessels in the inner harbour. Essar expressed its satisfaction over taking possession of facilities — an operational facility with no gestation period.

Essar Vizag Terminals, a wholly-owned company of the Essar Group, will complete the project in two phases.

Though the work should have been launched in 2014 after signing concession agreement on December 13, 2013, in Chennai, it did not materialise due to delay in achieving financial closure and other factors.

Timeline

Visakhapatnam Port, which is in the process of becoming a landlord port, handed over the facilities to Essar on payment of upfront fee of nearly Rs.190 crore towards value of existing facilities.

The project cost, which was originally estimated at Rs.845 crore, has been revised to Rs.1,200 crore. A timeline of three years has been set to complete the project.

Visakhapatnam Port, which finished fifth among major ports during 2014-15, is the largest iron ore handling facility in India.

It handled 8.3 million tonne of iron ore during last fiscal.

As per the concession agreement, Essar will pay a revenue share of 31.05 per cent to Visakhapatnam Port.

“We are sure the entry of Essar will increase exports further,” Visakhapatnam Port Chairman M.T. Krishna Babu told The Hindu .
Source: The Hindu