Paradip Port Trust (PPT) is mulling over retendering for the BOT (Built Operate, Transfer) iron ore berth in view of the not-so-satisfactory response from the Nobel Group-led consortium in regard to implementation of the project.

The concession agreement between PPT and Blue Water Iron Ore Terminal Pvt Ltd, a special purpose vehicle floated by the Hong Kong-based Noble Group in partnership with Gammon Infrastructure Projects and MMTC, was signed in July 2009 but nothing has happened since then. First, delays in getting environment and forest clearances held up the project. Meanwhile, court cases have rendered the implementation of the project even more difficult.

“We may have to invite fresh EoIs (Expressions of Interests) for the BOT iron ore berth,” a spokesman for PPT told Business Line over phone from Paradip. “The deadline we set for them to clarify their position expired long ago with no firm indication as yet.”

The 10-million tonne per annum capacity terminal was originally estimated to cost Rs 506.30 crore. On completion, the berth is to handle Panamax bulk carriers up to 125,000 dwt capacity. PPT was to provide supporting facilities such as dredging of the channel as well as the water in front of the berth, railway connectivity and back-up area. Besides, the port is to incur additional expenditure on relocating the CISF complex, iron ore plots leased to private parties, and upgradation of electrical facilities.

Several factors are believed to have led to uncertainty in the project. Cost escalation to nearly Rs 800 crore from the original Rs 500 crore or so due to the delay in getting various statutory clearances is one. More important volatility in global iron ore prices and a drop in domestic availability of iron ore due to the court order banning iron ore mining in many areas on the complaint of illegal mining have also hampered the project.

(This article was published on January 23, 2013)
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