The Hindu Business Line : NMPT seeks Ministry nod for joining SPV for Mangalore SEZ

THE board of the New Mangalore Port Trust (NMPT) has decided to write to the Union Shipping Ministry seeking its approval for joining the special purpose vehicle (SPV), to be formed for the implementation of Mangalore Special Economic Zone (SEZ).

Sources told Business Line that the board, which met in Mangalorerecently, has agreed `in-principle' to join the SPV.

In this regard, it was decided to write to the Union Shipping Ministry, seeking its approval for joining the SPV. However, modalities of joining will have to be worked out.

In the previous board meeting of the NMPT, it was decided to approach a consultant seeking its report on joining the SPV. Sources said that the consultant has submitted its report.

The NMPT's participation in the proposed SPV of the Mangalore SEZ assumes significance as a considerable portion of the SEZ activities is associated with the New Mangalore port.

On August 30, 2004, Oil and Natural Gas Corporation (ONGC) signed an agreement with the Kanara Chamber of Commerce and Industry (KCCI) and the Karnataka Industrial Areas Development Board (KIADB) for the development of an SEZ in Mangalore.

While signing the agreement, the oil major had shown interest in establishing an LNG terminal and a gas-based power plant in the vicinity of the New Mangalore port.

ONGC, through its subsidiary, Mangalore Refinery and Petrochemicals Ltd (MRPL), will invest around Rs 23,000 crore in various petrochemical-related projects in the Mangalore SEZ.

Political uncertainty: With the present political uncertainty in Karnataka — where a section of the Janata Dal (S) MLAs has withdrawn its support to the Congress-led coalition government and decided to form a new alliance with the BJP — seems to be creating problems for the SPV formation.

Though the Karnataka Industries Minister, Mr P.G.R. Sindhia, had declared last month that SPV would be formed by January 15, it did not materialise.

Sources in the industry said that they are hopeful of the formation of SPV by February 15. However, an early solution to the political uncertainty in the State would speed up the process of SPV formation, they added.