JSPL eyes 49% stake in Gopalpur port

Jindal Steel & Power Ltd ( JSPL) is keen to acquire 49% stake in Gopalpur Port Ltd (GPL), which is currently engaged in developing the seasonal port at the beach town in south Odisha’s Ganjam district into an all-weather port. This is the second investment proposal of JSPL in port sector in Odisha as the company is vying to set up a captive port Bahuda Muhan also in Ganjam district. “After we pick up stake in GPL, we will have the first right of refusal for developing a port at Bahuda Muhan as the site is within 50 km radius of the Gopalpur port”, said a JSPL official.

JSPL had evinced interest in acquiring stake in GPL after exit of one its original promoters, the Hong-Kong based Noble Group in May 2010. GPL was floated as a consortium of three partners with the other two companies being Odisha Stevedores Ltd (OSL) and Delhi-based Sara International Ltd (SIL). The port's total capacity was envisaged at 54 million tonne per annum (mtpa) and it was to be developed at a cost of Rs 3,500 crore. “Since the original promoters have to retain at least 51% equity as per the terms of the concession agreement, we are ready to pick up the residual 49% stake. The promoters are okay with our entry into the SPV. But, we are waiting for the state government to respond. As per Rules of Business, any change in the shareholding pattern for the port has to be approved by the government”, said the JSPL official.

Charchit Mishra, director, OSL said, “JSPL has evinced interest to pick up stake in GPL but no final decision has been taken yet. As regards the government's employment clause, there are no issues since we have agreed to it. The port's second phase expansion is expected to begin from March this year.” Phase-I of GPL, which involved anchorage port operations, started in January 2007 but PHase-II construction work was yet to begin. The Union ministry of environment & forests (MoEF) had granted environment clearance for the project on March 30 this year. Land measuring 393.67 acres has already been leased out in favour of GPL and 120.16 acres was under the possession of the port authorities. Steps are also afoot to lease out additional 140.2 acres of land for the port. GPL has already claimed to have achieved financial closure of Rs 1,400 crore for the first stage of Phase-II of the deep sea port, with the signing of loan agreement with a consortium of 11 banks.

For the proposed captive port at Bahuda Muhan in Ganjam, JSPL has already given a presentation to the state government regarding its plan. The port involves a capital cost of Rs 1424.4 crore while the operational cost of running the port would be to the tune of Rs 152 crore per annum. The captive port is expected to handle Capesize vessels (150,000 dead weight tonnage) for coal and coke and Handymax vessels (50,000 dead weigh tonnage-dwt) for general cargo. Phase-I of JSPL's captive port is scheduled to be operational by 2017.

Source: Business Standard