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The Centre has flagged off a techno-economic feasibility study to build a mega port to cater to the $40 billion west coast refinery and petrochemicals complex being planned by three state-run oil firms. The proposed port will come up at Vijaydurg in Maharashtra’s Sindhudurg district
“We are exploring the feasibility of a refinery-based government port in Vijaydurg,” I Jeyakumar, Chairman of Mormugao Port Trust told Business line.
“An in-principle decision has been taken by the government in this regard. Already, we have had advanced level discussions with the PSU oil refineries. We have mandated Tata Consulting Engineers Ltd to prepare a techno-economic feasibility report on the proposed port project to help us take a final decision,” Jeyakumar added.
Joint venture
The proposed port will be developed through a joint venture between Mormugao Port Trust, Mumbai Port Trust and Maharashtra Maritime Board (MMB) – the state government agency tasked with developing ports in Maharashtra, he said.
Indian Oil Corporation Ltd (IOC), Hindustan Petroleum Corporation Ltd (HPCL) and Bharat Petroleum Corporation Ltd (BPCL) signed a joint venture in June this year to build one of the world’s largest integrated refinery and petrochemicals complex with a capacity of 60 million tonnes a year. The refinery is expected to start operations in 2022.
“The proposed refinery is being developed by government oil PSUs. So, a government-run refinery with a government port will be more ideal. This port will have guaranteed cargo and require huge investments. Its logical to have a government port when a PSU refinery is coming so that we will cater not only to liquid cargo but all other cargo destined for Kolhapur and southern Maharashtra region. The entire area will be developed under the Sagarmala’s coastal economic region. That’s the vision of the government,” Jeyakumar added.
The refinery-based port puts a question mark on the viability of a private port in Vijaydurg that was awarded in March 2008 to a consortium led by Bangalore-based Jupiter Capital Pvt Ltd, the venture development, management and investment firm founded by businessman and Rajya Sabha law maker from the BJP, Rajeev Chandrasekhar.
Jupiter Capital was given the rights to develop and operate the 75-mt capacity port for 50 years through the memorandum of understanding (MoU) route – with any competitive bids.
After its original JV partner, Malaysia-based partner Pembinaan Redzai Sdn Bhd pulled out of the project, Jupiter Capital was permitted by the MMB to induct Privilege Hitech Pvt Ltd - a firm owned by Rakesh Kumar Wadhawan and his son Sarang, the promoters of Housing Development and Infrastructure Ltd (HDIL)- as a strategic investor with a 63% stake in the special purpose company – Vijaydurg Ports Pvt Ltd - formed to develop and operate the port.
Aside the change in the promoters, the planned port was hit by a ban on developing new ports in the Konkan region between August 2010 and December 2013, delaying the environment clearance process and the preparation of a detailed project report. The project has since received the terms of reference for environment approvals and the process is underway.
Atul Patne, CEO of MMB said that the Jupiter Capital-Privilege Hitech team has been granted a two-year extension to complete the pre-construction formalities. “They will submit environment clearance and go ahead with the project,” he told BusinessLine .
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