Kakinada port upbeat on burgeoning operations

Kakinada Seaports Limited's Q2 revenues zooms 113%

Kakinada Seaports Limited (KSPL), which witnessed a spurt of 113.34 per cent growth in revenues in the second quarter, is all set to see its operations burgeon with newer facilities coming up and more businesses sprouting up in and around the port.

The port recorded Rs 14.85 crore in revenues during the second quarter of the current fiscal, as compared to Rs 6.96 crore in the last fiscal's corresponding period.

The port is likely to get a fillip with the Oil and Natural Gas Corporation (ONGC) formally shifting its base from Visakhapatnam to Kakinada from December 1, 2004.

About three offshore supply vessels will operate from Kakinada acting as a lifeline for the ongoing deepsea oil and gas exploration activities undertaken by ONGC in the K-G Basin. Reliance is already operating from the Kakinada port. Liquid cargo handling has been a major strength of this port till now.

Moreover, the Indian Railways has formally notified the Rs 10-crore railway sliding "" between the anchorage port and the deepwater port "" open for transport.

The railway sliding is expected to help faster and efficient evacuation of cargo with iron ore, coal and other minerals taking early advantage of this facility.

In addition to this, the maintenance dredging works, which are estimated to cost around Rs 30 crore, are poised to start from December 1.

After the completion of these works, vessels having a dead weight of up to 50,000 tonnes can be berthed at the port. Works on railway and back-up area development along with the maintenance dredging are expected to be completed by January 2005.

More good news that will add to the bustle of cargo handling comes in with the KSPL recently approaching the state government for a letter of comfort for the development of aluminium export facilities at the port. According to preliminary information, Vedanta of Sterlite Group, a major aluminium manufacturer and exporter from Orissa, is said to have issued a letter of intent (LoI) for a long-term arrangement for exporting one million tonnes of aluminium from Kakinada port annually, once the necessary systems are put in place from 2006.

Sources close to the development said that these export volumes alone will yield an additional Rs 6 crore revenue.

In addition, L&T is said to be planning the setting up of an exclusive fabrication facility for engineering components to cater to the drilling operations in the ongoing oil and gas exploration activity that is presently underway in the K-G Basin.

Though sources confirmed that L&T is planning to invest around Rs 100 crore in two phases on the fabrication plant, they, however, said that it was too early to say whether this facility would be located at Kakinada. Besides Kakinada port, the L&T group is vying for other options -- two ports in Orissa and one in Tamil Nadu, sources added.

KSPL has already achieved the financial closure for the phase-1 development of the Kakinada port, by tying up with IDFC and Union Bank for a Rs 115-crore loan.

The promoters are expected to chip in around Rs 70 crore for the development of the port. Senior managers of KSPL said that the early completion of the proposed Kakinada-Pithapuram railway line, costing around Rs 80 crore, is the key to the overall development of the port as well as the region.