The Hindu Business Line : Kandla port charts Rs 5,000-cr investment plan

Kandla port has begun the work of identifying bidders for the construction of six new cargo berths, two of which are expected to be ready by November 2007. Four of the berths will be constructed with private participation on a build-operate-transfer basis and are estimated to cost Rs 430 crore. The port has also started work on a capital dredging project in its 27-km navigation channel that will enable it to take in Very Large Crude Carriers.

Kandla port's mega plans include six new cargo berths, a deeper navigation channel and a satellite port.

Ahmedabad/Kochi

KANDLA port has recently received the Centre's go-ahead for its plans to build six new berths, four of which will be constructed with private participation on a Build-Operate-Transfer (BOT) basis.

With the clearances in place, Kandla will soon invite pre-qualification bids for construction of the two cargo berths that will be funded by the Port. The process of identifying technical advisors for the project is underway, the Port Chairman, Mr A. Janardhana Rao, told Business Line.

Construction of the 13th berth, which will begin in March 2006, is expected to be completed by September 2007. Work on the 14th berth will begin in June 2006 and completed by November the following year. The two berths are estimated to cost Rs 100 crore, and the funds will come from internal accruals.

The 13th and 14th berths will have a total quay length of 410 meters and a designed draught of 13.5-14 metres. They will be able to handle post-Panamax size vessels of 240m length and 75,000 DWT (Dead Weight Tonnage), said Mr Rao.

As of now, Kandla has 11 operational dry cargo berths with a capacity to handle about 10 million metric tonnes per annum (MTPA). But the actual cargo handled is higher, at over 14 MTPA. The construction of the 12th berth is likely to be completed by September next year. Simultaneously, the Kandla Port Trust has set in motion the process of locating a financial advisor to prepare the documentation for the private sector partners who will build four new berths under the BOT scheme.

IDFC Ltd has emerged as the lowest bidder to prepare the draft Request for Qualification (RFQ) and licence agreements, and the next board meeting is likely to approve the appointment of the advisor.

These will be mechanised cargo berths of 275 m each, with a draught of 14 m. The four berths will cost about Rs 430 crore, said Mr Rao.

Apart from the new berths, Kandla has also started work on a capital dredging project in its 27-km navigation channel that will enable it to take in Very Large Crude Carriers. The Rs 86 crore dredging assignment has been awarded to Jaisu Shipping, and Kandla has actually managed to get extremely competitive rates for the project that was expected to cost over Rs 100 crore.

The Port plans dredging works to increase the available draught from 11.5 m to 13.5 m in the next two years at the cost of Rs 136 crore.

At present, Kandla handles 1.86 lakh twenty foot equivalent units (TEUs) per annum, which will rise to five lakh TEUs once the proposed container terminal is commissioned. The Port's 11th and 12th berths will be dedicated to handling container cargo.

ABG Shipping Ltd, in partnership with Voltri Terminals, has emerged as the winner in the bidding process by offering a 48.997 per cent revenue share. Kandla Port Trust is also awaiting Central Government clearance for the development of a satellite port at Tekra, outside the Kandla creek, according to Mr Rao.

"There is a draught restriction in the Kandla creek due to a bar in the mouth of the creek. To get around the limitation, Kandla Port Trust has envisaged a plan to develop a greenfield satellite port, near Tuna, 30 km away. The greenfield port will handle various kinds of cargo," he says.

The Port's Board has approved the proposal in principle and will enter into a memo- randum of understanding with IFFCO for the first phase of development, subject to Government Approval, he said.

At Tuna, the berthing structure will be a `T'-shaped jetty into the open sea. The project comprises the main jetty and an approach with pile foundation. The port will have a back up area of 8 lakh square metres. The project cost will be approximately Rs 1200 crore, of which Rs 700 crore will be sought from the Government as budgetary support while the Rs 500 crore would come from internal accruals.

The total investments planned at Kandla Port in the next five years amount to Rs 5,081 crore. The additional capacity generated as per the expansion exercise would be 32.40 MTPA, taking the total capacity of the port to 73.60 MTPA. For the entire expansion project, Kandla Port Trust will seek budgetary support to the extent of Rs 768 crore from the Central Government while its own contribution will be about Rs 2,050 crore. The rest of the funds will come from public-private participation.

Meanwhile, Kandla Port is making efforts to recover its position as the second largest port in India. Last year, although the dry cargo showed an increase in volumes, there was a shortfall in handling of petroleum crude at the Vadinar SBM as Indian Oil Corporation experienced problems with its Koyali refinery at Vadodara. Kandla's crude oil throughput is recovering and was up 39 per cent in September 2005 as compared to the same period last year. Overall, the cargo throughput at the port touched 22.53 MT till September, an increase of 2.33 MT over the same period last year.

"We continue to be the most economical port in the country. We slipped to number four in the country last year, but we are confident that with the proposed investments, we have the potential to become the numero uno port in India. We hope to regain our position as the second largest port in the near future," says Mr Rao.

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