Adanis to set up four berths at Mundra

The Ahmedabad-based Adani Group, which runs the Mundra Port in Kutch district, will construct four new berths at the port under a Rs 200 crore expansion plan.

The company, which runs the port under the Adani Port (APL) banner, had recently started work on its special economic zone (SEZ) at Mundra. The group, which will require to invest Rs 7,000 crore in the next 10 years for the SEZ, has been working on various options to fund the projects being developed in Mundra.

"With the business from the Mundra Port showing a sharp rise in recent years, we have decided to construct four more berths. At present we have two container berths and four multi-purpose berths and we will be constructing two berths for container terminal and two more to be added for handling multi-purpose cargo. The multi-purpose berths are expected to be operational by the end of 2005," said Sanjay Gupta, chief executive officer of the group.

The addition of the multi-purpose berths will not only augment the capacity but will also assist in attracting cargo to the port.

APL has also decided to develop more back-up facilities in the port, besides the development of the SEZ.

A recent study by AF Ferguson estimates that the port can handle nearly 119 million metric tonne of cargo by 2027-28 and the cargo traffic at Mundra Port will grow by around 40.58 million metric tonne by 2011-12.

Sources said APL will need to invest around Rs 200 crore for the expansion activities which may be funded internally. The group, which has received clearance from the Centre for the Mundra SEZ in last September, is planning to make the zone operational by December end.

"The primary works for development of the SEZ has recently begun with the important task of initiating the land development works and soil investigation. We will be investing around Rs 700 crore initially but the total investment for the Mundra SEZ will go up to Rs 7,000 crore in the next 10 years. For funding the project we are working on various options including finding out a suitable equity partner and debt funding. Nothing has been finalised so far," Gupta said.

Industry sources said APL is also working on the possibilities of going for an initial public offering to fund the SEZ and port expansion costs. The Adanis already have a fully-operational port with a container terminal, exclusively being handled by the international terminal handling company, P&O Ports, close to the SEZ project.

The company is planning to exploit the advantage of the close proximity of its port with the zone. The SEZ will also be located within a close distance from Kandla port, the country's No. 2 port, next to Vijag.