Logistics

Shapoorji Pallonji pushes back new port project in Gujarat by three years

P Manoj Mumbai | Updated on November 03, 2020 Published on November 03, 2020

Short-term strain on funding due to Covid-19, effect of cyclones Vayu and Maha responsible for the delay

The Shapoorji Pallonji Group has pushed back the completion of a new port at Chhara in Gujarat’s Gir-Somnath district by three years to December 2023 citing “financial issues” at the firm.

The Expert Appraisal Committee (EAC) in the Ministry of Environment, Forest and Climate Change has endorsed an application filed by Simar Port Pvt Ltd seeking extension of the environmental and CRZ clearance granted by the Ministry by three years till January 2024.

Simar Port Pvt Ltd is a special purpose company (SPV) formed by Shapoorji Pallonji Infrastructure Capital Company Ltd (SP Infra) to build the port at Chhara with a capacity to handle 40 million tonnes (mt) of bulk cargo, two million twenty foot equivalent units (TEUs) of containers, 20 mt of LNG and 10 mt of petroleum products under a concession agreement signed with the Gujarat Maritime Board.

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The Port’s master plan involves 10 berths ― four bulk dry/liquid, three container berths, two LNG berths and one for handling petroleum products.

HPCL Shapoorji Energy Ltd, a joint venture between state-run oil refiner HPCL and SP Infra, will develop the LNG regasification terminal with an initial capacity of five million metric tonnes per annum (mmtpa). The capacity of the LNG terminal can be expanded to 10 mmtpa.

“Revenues of Shapoorji Pallonji Group are severely impacted due to ongoing pandemic of Covid-19. This has put short-term strain on SP Group for funding the project. This has resulted in delays in equity infusion in the project which has affected land acquisition and construction activities,” Simar Port Private Limited said in its application to the EAC.

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Simar Port told the EAC that the project was also delayed due to cyclones Vayu and Maha that hit the project in June and October 2019 respectively. This resulted in damage to the temporary load-out jetty which further affected the project schedule. The temporary load-out jetty has since been restored.

Besides, Simar Port is yet to receive possession of 27 acres of Government land from the Gujarat Maritime Board, delaying the construction activity as the land is critical for the development of bulk berth and approach trestle.

The ongoing force majeure event arising from coronavirus has further impacted the progress of the project.

“The exact impact of the same is yet to be assessed. However, with slow resumption of activities, Simar Port Pvt Ltd anticipates that revised timelines can be achieved,” it submitted before the EAC.

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Published on November 03, 2020
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