India's first corporate port, Ennore Port Ltd, has said it was ready to issue tax-free bonds to raise around Rs 1,000 crore. The proposed fund raising is to support its expansion and infrastructure projects. Besides, the port said it was looking at a initial public offering (IPO) by 2014.
S Velumani, chairman and managing director, Ennore Port Ltd (EPL), said, “We are ready for the issue (of tax free bonds), the ministry (Union Ministry of Shipping) has sent the proposal to the finance ministry and is awaiting its nod.”
He added, the board would meet at the end of the month to discuss the re-tendering process for the Rs 1,407 crore container terminal project. It may be noted that recently Eredene Capital PLC, a UK-based infrastructure fund, had withdrawn from the Ennore Port container terminal project.
The fund, trading on the Alternative Investment Market (AIM) of the London Stock Exchange and holding 22 per cent stake in the project, said the decision was taken in the light of changed economic outlook in India since the concession was granted — the increased cost of local financing, depreciation of the rupee and lower projected growth in container traffic.
On the utlisation of the Rs 1,000 crore, Velumani said, the port had envisaged various investment plans to create infrastructure, including berth, LNG terminal, car terminal, dredging and others.
These projects would help the port increase cargo handling capacity to 90 million tonnes by 2020, Union Minister G K Vasan had said earlier. In 2011-12, the port handled 14.95 million from 11.01 per cent in 2010-11, an increase of around 35.87 per cent
The Ennore Coal Port Project as it was described initially was conceived to handle thermal coal required for the power plants for the Tamil Nadu Electricity Board. Ennore Port began commercial operations in 2001.
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Functioning on the Landlord Management Model, the port has primarily concentrated on development of common infrastructure like creation of necessary depths in the harbour and channel by dredging, providing navigational aids and other marine services, developing road and rail connectivity among others.
In addition to the Marine Liquid Terminal, the Iron Ore & Non-TNEB Coal Terminals have been developed through the Private Sector Partnership at a cost of over Rs 1,000 crore.
Based on an MoU signed with Nissan Motors for the export of cars, EPL has developed a car terminal for the export of cars to Europe and for handling other project cargoes at a cost of Rs 110 crore. This berth has been designed to accommodate the largest of car carriers, capable of carrying up 8,000 cars. The entire investment has been made by Ennore Port itself.
He said despite its huge development plan and large capital expenditure, EPL had implemented the project without seeking any budgetary support from the government.
The Capital Dredging Phase – II project executed by the Dredging Corporation of India (DCI) to create necessary depth to handle larger vessels is in progress at an estimated cost of Rs 170 crore and is expected to be completed by March 2013. Under the project, the port’s channel depth has already been increased from 16 metres to 18 metres. The port was also in the process of establishing an LNG terminal by Indian Oil Corporation Limited at a cost of about Rs 4,300 crore with a capacity of 5 mtpa, said Vasan.