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Paradip port iron ore berth project left in limbo - 2012-08-07

The future of Paradip port’s build-operate-transfer (BOT) iron ore berth remains uncertain even as environment clearance for the project, the last hurdle, has come after a long wait.

Hong Kong-based Noble Group, with which the port authorities had signed a concession agreement three years ago for construction and operation of a 10-million tonne per annum (mtpa) iron ore berth on BOT basis, is believed to have developed cold feet about the project. Blue Water Iron Ore Terminal Pvt Ltd, the special purpose vehicle floated by the Noble-led consortium (MMTC and Gammon India are the other partners) was to implement the project.

“There is no firm indication as yet from the Noble Group about its intention that is, whether it will continue with the project or withdraw from it despite our insistence to complete the formalities at the earliest now that the last hurdle has been overcome,” observe port sources. “The Group, it appears, is no longer interested in the project presumably because of a not-so-satisfactory situation on the iron ore front. Also, the three-year delay has pushed up the project cost to around Rs 800 crore from the original estimate of a little less than Rs 600 crore.”

The Essar Group, which has signed the concession agreement for construction and operation of a 10-mtpa coal berth on BOT basis, wants to start work at the earliest. The total cost of both the berths is estimated at Rs 1,000 crore.

The sites for both the BOT berths abut each other and the dredging of the waterfront that spans both can be done at one go. If the work on the iron ore berth cannot be started immediately, a separate programme will have to be worked out for the coal berth. This will entail a major change the original work schedule. Additionally, the Essar Group, the concessionaire for the coal berth, will not want such uncertainty.

Further, there will have to be a relocation of plots allotted to iron ore exporters. Half of them may have to be relocated immediately and the rest at a later stage. However, no decision in these matters can be taken till the Noble Group spells out its position.

Meanwhile, the Essar Group is going ahead with the mechanisation of CQ3 berth of the port. On completion of the project, the berth is to be used by the group almost exclusively, mainly to handle coastal shipments of iron ore pellets being produced at the pellet plant commissioned recently by it at Paradip.

Source : Hindu Business Line