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Jindal Steel & Power Ltd’s (JSPL) plan to acquire up to 60 per cent stake in Gopalpur Ports Ltd (GPL) has been aborted with the Odisha government refusing to permit the company to acquire controlling stake in the project.
The state government reasoned that acquisition of controlling stake by JSPL would violate the terms of concession agreement signed with the original promoters of GPL.
“The law department has raised objections to acquisition of 60 per cent stake in GPL by any firm. As per the concession pact signed with the developers of GPL, the original promoters of GPL have to retain at least 51 per cent stake for at least three years from the start of commercial operations. So, we have refused dilution of 60 per cent in GPL in favour of JSPL,” said an official of commerce & transport department.
JSPL said, the state government has reacted belatedly to its earlier proposal of acquisition of 60 per cent share in the port project.
“Initially, we had submitted a proposal for picking up 60 per cent stake in GPL. Later, JSPL presented a revised proposal, stating it is okay with 49 per cent equity since the concession pact would not allow the company to acquire controlling stake in the project. But, our revised proposal is yet to be sent by GPL promoters to the state government,” said a senior company official.
GPL was initially floated as a consortium of three partners- Hong Kong-based Noble Group, Odisha Stevedores Ltd (OSL) and Delhi-based Sara International Ltd (SIL). Noble Group exited the consortium in May 2010. The consortium was to develop the seasonal port at Gopalpur into an all-weather port. Presently, OSL’s holding in GPL is 50.5 per cent while the rest 49.5 per cent is with SIL.
The port started its commercial operations last month when 7,500 tonnes of ilmenite, the sand mineral product of Odisha Sands Complex (OSCOM), a unit of the Indian Rare Earths Limited (IREL), was shipped through a small vessel to South Korea.
The port’s total capacity was envisaged at 54 million tonne per annum (mtpa) and it was to be developed at a cost of Rs 3,500 crore.
The state government has initiated the process to resume 269 acres of mined out land of Indian Rare Earths Ltd (IREL). The patch will be leased out to GPL for expansion.
