Logistics

SAIL plans to invest in new ports, terminals

SANTANU SANYAL Kolkata | Updated on May 19, 2011 Published on May 19, 2011

Bulk cargo getting discharged - (file photo): K.R. Deepak   -  Business Line

In its bid to have captive cargo handling facilities on the east coast, Steel Authority of India Ltd (SAIL) is mulling, among other things, investments, including equity participation, in the construction of a new port or berths, terminals or creation of any similar facility to cope with the projected rise in its the import of dry bulk cargo.

In fact, SAIL has already invited Expressions of Interest from firms keen to provide total logistics solutions to handle the imports, covering discharge, handling and storage and finally evacuation of the materials out of the port to steel plants.

Coking coal import

SAIL's import of coking coal is projected to rise to 11.7 mt in 2011-12, 14.3 mt in 2012-13 and further to 18.5 mt in 2014-15 from 10.2 mt in 2010-11. In 2014-15, the production of hot metal is estimated to go up to 23 mt, up from 14 mt in 2010-11.

Currently, coking coal accounts for more than 90 per cent of SAIL's import of raw materials. However, in future, the imports of dolomite and coke are indicated to meet the requirements of plants located at Bhilai, Bokaro, Burnpur, Durgapur and Rourkela.

Other options

Apart from equity participation in the construction of a new port, berths and terminals, SAIL, it is learnt, may consider other options such as long-term arrangements in any existing port for an exclusive use of berth without investment but supported by minimum guaranteed throughput, have a stake in SPV, develop facility and be the end users, build a new berth in a new port and pay the port the common dues and transloading facilities.

Right now, SAIL uses ports at Haldia, Paradip and Visakhapatnam for routing its raw materials as its plants are mostly located in the east.

In 2010-11, Visakhapatnam port handled 4.8 mt of coking coal on SAIL account, Haldia 4.3 mt and Paradip 1.1 mt. At present, coal is imported mostly in Panamax vessels and some times in Handymax vessels. SAIL, it is felt, has to reorient its port operations policy, keeping in view the projected increase in imports of raw materials, particularly, coking coal. It has to bring the materials in larger vessels to obtain the full benefits of transportation economies.

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Published on May 19, 2011
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