The Orissa government will sign a memorandum of understanding (MoU) with Essel Mining and Industries Ltd (EMIL), an Aditya Birla group company, for the development of a Rs 1500 crore captive port at Chudamani.
While the chief minister had approved the proposal, the defence ministry recently cleared the project, paving the way for signing the MoU, sources said.
The proposed captive port will cater to the requirement of the group company and will have a 3 million tonne cargo handling capacity initially. This will subsequently increase to 10 million tonne when fully commissioned.
“The state government has approved the proposal and the formalities are being fulfilled for signing of the MoU”, Pradeep Kumar Jena, secretary, commerce and transport department, Orissa government told Business Standard.
Sources said, the government has prepared the draft MoU and it likely to be sent to the company soon for soliciting its opinion. Once that is over, the date of signing the MoU will be fixed.
A consortium of Aditya Birla Group companies will develop the port which is expected to handle captive cargo of the group companies like cement, iron ore, thermal coal, limestones, gypsum, clinker, copper.
The company exports about 2 to 3 million tonne of iron ore from the state every year.
Though the company proposed to set up a captive port at Chudamani in September 2005, the proposal was not accepted due to the opinion of the state law department which stated that going ahead with the port project may be violate clause 3.5 of the Dhamra Concession Agreement.
Following the meeting of Kumar Mangalam Birla, chairman, Aditya Birla Group (ABG) with the chief minister Naveen Patnaik in April 2008, the company made a presentation before the chief minister on 28 May 2008, citing legal opinion in the matter.
It argued that a port in Chudamani is feasible and is in conformity with the state’s port policy. Chuadamani, being a captive port, will not affect the commercial interest of the Dhamra port which is a general multi-user port.
Besides, the company maintained that the development of the Chudamani port will not be violative of the clause 3.5 of the Dhamra Concession Agreement.
The last hurdle on the way of the project was cleared when the defence ministry approved the project following a meeting between the officials of the state government and Defence Research and Development Organisation (DRDO) convened by the chief secretary in December 2008.
