The Hindu Business Line : Reliance’s Rewas port project ‘lands’ in trouble

Mumbai, Aug 27 Reliance Industries’ Rs 5,000-crore Rewas Port project, which is expected to give the vital sea-link to its proposed mega Mumbai SEZ, is yet to kick off, as the company is still waiting to get possession of the land allocated by the Maharashtra Government. As of now, the first phase of the project, which was scheduled for completion by 2010, is likely to be delayed by more than a year, while the cost over-run may exceed Rs 1,000 crore.

In what is yet another instance of a mega project landing into problems due to land-related issue, Reliance is neither able to float tenders for the massive dredging work required nor conclude talks with financial institutions to tie up the funds.

Rewas Port, which is 65 per cent owned by various investment companies of Reliance Industries, 24 per cent by Amma Lines and 11 per cent by Maharashtra Maritime Board, is building an all-weather deep draught port, 10 kmsouth of Jawaharlal Nehru Port.

SEZ project

The project is crucial for Reliance, as its SEZ project is linked to the proposed port. Incidentally, the SEZ project itself has hit a roadblock due to land related hurdles.

An official with the Maharashtra Maritime Board confirmed that the land notified for the project by the State Government is yet to be transferred to the port company. The project is being developed in three phases. The first phase, costing about Rs 5,114 crore, involves 10 berths with a capacity of 55 million tonnes. After the completion of the three phases, the port will have 70 berths with a capacity to handle 457 million tonnes.

Location-specific

RIL has been ready to float tenders for what is said to be India’s largest dredging project, but is unable to take the first step as it has not yet got the 1,000 hectares of land required for development in its pocession. The land has already been notified, but is yet to be transferred to the port company. “As it is a location-specific project, Reliance cannot even think of pulling out of Rewas, as the Tatas have threatened over Singur,” said an official associated with the project.

According to the original schedule, the bidding process for the dredging work was to have been completed by 2007-end so that the successful bidder could begin the work from January 2008. But, the company is yet to float the global tenders, even though, sources said, Reliance had been in touch with leading international dredging houses to keep them informed of the developments. It is feared that further delay of the dredging project could prompt dredging companies to shift their dredgers elsewhere, as the present dredging market is marked by shortage of dredgers.

Draught details

The first phase of the project involves dredging of over 120 million cubic metres in the Amba river at Rewas at an estimated cost of Rs 1,800 crore—this is claimed to be even bigger than the Sethusamudram ship channel project. The port will have a draught of 14.5 m to start with, which will be increased to 20 m in a phased manner.

Not only the dredging work, but also Reliance’s bid to tie up funds is held up due to the land issue. A consortium of banks led by ICICI Bank has agreed to lend about Rs 3,400 crore for the first phase of the project, but without the land in the company’s pocession, it cannot conclude any such finance deals.