The Hindu Business Line : Sical Logistics to finalise location for Jurong Port joint venture in 3 months

Sical Logistics has identified several locations on east and west coasts for the port project it proposes to launch in partnership with Jurong Port Ltd of Singapore. “We will finalise the location within the next three months”, Mr S. Rangnekar, Managing Director and Group CEO of the company, told Business Line on Tuesday.

The cost of the project is estimated at Rs 1,500 crore and Sical is to have 51 per cent equity stake in it and Jurong, the balance on a debt-equity ratio of 2:1.

The proposed port, when ready for operation, will handle bulk items, mainly iron ore exports and coal (both coking and thermal) imports. “To start with, it will have two berths at the most”, Mr Rangnekar said drawing attention to the difficulties being experienced in selecting an appropriate site.

There are so many issues which, as he explained, needed to be sorted out such as the availability of 500/600 acres of land in one lot, proximity of the mineral to be exported, the connectivity, the growth prospects in the hinterland, freedom from political militancy and, capping it all, a helpful State Government. Also, the proposed project must be located away from another port.

Ennore port venture

Sical Logistics, it might be noted, is already involved in several port projects. For example, it is the majority partner in the iron ore handling facility being created in Ennore port, L&T and MMTC being the other partners.

L&T is holding only 11 per cent stake and MMTC, as and when it joins, 26 per cent, the balance 63 per cent going to Sical. “Right now, we are holding 89 per cent which is to come down to 63 per cent as soon as MMTC joins”, said Mr Rangenekar exuding hope that MMTC would join shortly.

The first phase of the Ennore iron ore berth is scheduled to be commissioned in 2010. While the total capacity of the project is estimated at 12 million tonnes, it will be limited to six mt in the first phase.

More participation

Sical also participates in two other container terminal projects, one each in Tuticorin and Chennai.

While the Tuticorin terminal in partnership with PSA is already functioning since 1999, the one at Chennai, also in partnership with PSA, is to be commissioned in September 2009. In both the terminals, Sical is a minority partner – 37.5 per cent in Tuticorin and 27 per cent in Chennai.

“We’ve also been shortlisted for the BOT port project in Karwar, designed to handle bulk cargoes”, Mr Rangnekar said adding, “we’ll try to participate in as many BOT port projects as possible”.

Asked if Sical was mulling participation in foreign port projects, Mr Rangnekar replied, “not at the moment”. However, some time ago, Saudi Arabia was planning to privatise berths in Dammam and Jeddah ports and Sical was interested in it. However, the proposal did not make headway, he added.

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