Odisha to revive stalled non-major port projects

Tata Steel Ltd will acquire the majority stake in Creative Port Development Pvt Ltd

After an intervening phase of lull, non-major port projects proposed in Odisha are back on track. The state government is gearing up to set in motion the stalled land acquisition process for such ports. Though land acquisition was initiated and concession agreements inked for some of the port projects, they failed to make headway due to a pending order by the Odisha High Court that had restrained the state government from going ahead with the projects till the matter was disposed off.

“The Odisha HC has finally disposed off the case pertaining to the non-major port projects as the petitioner did not turn up for hearing. Now, the decks are cleared. The state government will shortly re-commence the incomplete land acquisition for such projects," said a government official.

The state government had identified a string of locations for development of non-major port projects- Subarnarekha river mouth, Astaranga, Jatadhari Muhan, Bichitrapur, Palur and Barunei Muhan. Some of the chosen sites did not take off for port operations as the proponents walked out of the ventures while the one at Barunei Muhan was shelved because of its potentially damaging ecological impact.

However, the resumption of land acquisition for the port projects spells well for players like Tata Steel. The steel company, in a recent regulatory filing with the Bombay Stock Exchange (BSE), announced it is going to acquire 51 per cent stake in the proposed Subarnarekha port. Tata Steel Ltd has executed a definitive agreement with Chennai-based Creative Port Development Pvt Ltd (CPDPL). The pact is meant for the development of Subarnarekha Port at Chaumukh village in Odisha's Balasore district.

As per the agreement, TSL will acquire the majority stake in CPDPL. The port development is envisaged through a wholly-owned subsidiary, Subarnarekha Port Pvt Ltd (SPPL). The acquisition and development is subject to certain conditions precedent, detailed technical assessments and financial closure.  The cost of acquisition will depend on the capital outlay of the project which is under investigation and will be firmed up after studies are completed. Though the exact cost of acquisition will be known at the completion of the project, the current outlay for the acquisition is estimated at Rs 120 crore.

CPDPL, promoted by two technical entrepreneurs, Ramani Ramaswamy and Ramaswamy Rangarajan, had entered into a concession agreement with the Odisha government in January 2008 to develop the Subarnarekha Port as an all-weather deep-draft facility. A detailed engineering study to arrive at the configuration and the project cost will be undertaken soon.

The port project proposed at Subarnarekha needs 1215.43 acres of land for the port area and 1565.93 acres for the rail corridor. Out of 1215.43 acres of land needed for the port area, 158 acres constitute Gochar land, 193 acres Bhudan land, 138 acres of encroached land and the remaining 724 acres being free land.

According to the concession agreement signed originally, the port would have an initial capacity of 10 million tonnes per annum (mtpa) which was to be scaled up to 40 mtpa in 10 years. 

The state government had also approved the establishment of a minor port atAstaranga in Puri district by Hyderabad-based Navyug Engineering Ltd. The initial port capacity is pegged at 25 million tonnes per annum (mtpa) with the port taken up a cost of Rs 7417 crore. The port capacity will be eventually scaled up to 70 mtpa.