Vizag port to privatise a berth

Tenders to be soon called for privatisation of Western Quay-7 berth on BOT basis

The Visakhapatnam Port Trust (VPT) has decided to privatise the recently constructed Western Quay-7 (WQ-7) berth in its inner harbour and has invited bids from interested companies.

Alumina exporters like Vedanta Alumina Limited and Sterlite Industries (India) Limited are some of the companies that have evinced interest in participating in the bid. If the privatisation bid sails through, VPT could earn anywhere between Rs 8 crore and Rs 10 crore every year.

Speaking to Business Standard, Sripadha Sastry, chief engineer at VPT, said that alumina exporting firms like Vedanta Alumina Limited, Sterlite Industries (India) Limited and Sulakshani Mines and Minerals have approached the port authorities for the allotment of berth and land for alumina exports.

"Keeping this demand in mind, we have decided to invite tenders from the prospective bidders for the allotment of WQ-7 berth with requisite land on a non-exclusive basis for alumina exporters," he said.

The successful bidder would need to invest between Rs 40 crore and Rs 60 crore for the erection of the mechanical handling equipment at the WQ-7 berth.

Nalco (National Aluminum Company) has been exporting alumina powder and alumina ingots for the last several years from VPT. The former has invested about Rs 100 crore in the Vizag port to create export facilities.

"We are going to invite tenders to allot WQ-7 berth on a build-operate-transfer (BOT) basis to private parties very shortly," Sastry said.

A few years back, VPT had proposed the allotment of the WQ-6 and WQ-7 berths on a captive basis to Larsen & Toubro and the Indian Aluminum Company (earlier Utkal Alumina Limited) respectively for the export of aluminum from Vizag port.

Both the companies apparently did not achieve financial closure for their respective projects and hence had not entered into any binding agreement with VPT for the construction of these berths on a captive basis.

In the meantime, VPT had taken up the construction of the WQ-7 berth with funds accrued internally and recently completed the civil works.

VPT has invested close to Rs 40 crore to complete the civil works and the berth can handle up to 60,000 dwt (dead weight tonnage) vessels in the inner harbour. No work has been initiated yet on the WQ-6 berth.

The port hopes that the WQ-7 berth would mirror the success it had in privatising a berth in the outer harbour. Two years back, VPT had allotted one berth on a BOT basis to Visakha Container Terminal Private Limited (VCTPL) to handle container vessels. VCTPL had invested nearly Rs 100 crore on equipment at the berth.

Sailing on the privatisation wave

• Alumina exporters like Vedanta Alumina Limited and Sterlite Industries (India) Limited are some of the companies that have evinced interest in participating in the bid
• Privatisation move likely to help port earn about Rs 10 crore annually
• Successful bidder needs to invest between Rs 40 crore and Rs 60 crore for the erection of the mechanical handling equipment