Paradip Port Trust (PPT) is mulling to retender the BOT (Built Operate, Transfer) iron ore berth, in view of poor progress of the project.

Concession agreement

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 materialised so far.

Problems in in getting environment and forest clearances has delayed the work, and court cases over relocation of iron ore plots have created further uncertainty.

“We may have to invite fresh EoIs (Expressions of Interest) for the BOT iron ore berth,” a spokesman for PPT told Business Line over phone from Paradip. “The deadline we set for the consortium has expired 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 is to provide the supporting facilities like dredging of the channel, water in front of the berth, Railway connectivity and back-up area.

Besides, the port is to incur additional expenditure for relocating the CISF complex, iron ore plots leased to private parties, and upgradation of electrical facilities.

Project cost

Several factors are believed to have led to flagging interest of the concessionaire. The delay has pushed up the project cost to around Rs 700-800 crore.

But more important are factors like the volatility in the global iron ore prices and the uncertainty over domestic availability of ore due to the court order banning iron ore mining .

(This article was published on January 23, 2013)
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