The Hindu Business Line : Dhamra Port looks to secure foreign loan

Kolkata, July 24 The Dhamra Port Company (DPC), a joint venture between Tata Steel and Larsen & Tourbro, is exploring opportunities for securing foreign loan to fund the dredging cost for the port project in Orissa.

The dredging cost is estimated at Rs 600 crore out of the total project cost of about Rs 2,400 crore to be funded largely by loan (Rs 1,900 crore) and partly by equity (Rs 500 crore) to be subscribed in equal proportions by the two partners.

“Since the payment for the dredging job has to be made largely in foreign exchange, it makes sense to borrow in foreign currency to make the payment,” according to DPC sources.

“The rate of interest on foreign loan, even after taking into account the hedging for probable fluctuations in parity rates, should be lower than that on the rupee loan.”

The consortium of eight banks headed by IDBI Bank is to provide the rupee loan at 9.75 per cent rate of interest.

To the extent the foreign loan becomes available, the size of the rupee loan will get reduced.

The dredging job is to be undertaken by Dredging International, the Belgium-based world dredging major, through its Indian outfit, International Seaport Dredging Ltd.

The job presupposes dredging of an 18-km long channel and removal of about 60 million cubic metres of dredged spoilt over three years.

Mulls SPV

DPC, it is further learnt, also mulling floating an SPV (special purpose vehicle) for the port’s railway operations. Several firms are believed to have showed interest in it. “However, nothing has been firmed up as yet,” observe the sources pointing out that SPV or no SPV, DPC would currently go ahead with the construction of the railway lines on the 60-km stretch between Bhadrak located on the Howrah-Chennai railway line and the port project.

The willing partners, it is felt, could join hands and form the SPV even at a later stage. The capital cost of the construction of the project is estimated at Rs 400 crore.

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