Vizag port to sign MoU with Utakal Alumina

The Visakhapatnam Port will sign a memorandum of understanding (MoU) with Utakal Alumina International Limited (UAIL) for installation of a shipside mechanised facility to handle alumina/caustic soda at the West Quay-7 berth in the inner harbour.

The port has spent more than Rs 40 crore to construct WQ-7 berth.

It has now decided to provide mechanical handling facilities at the berth at an estimated investment of Rs 30 crore.

It would install a common shipside mechanised facility, which includes 2,200-tonne per hour capacity ship loader, 625-tonne per hour capacity caustic soda unloading arm, conveyor system and a pipeline from berth to common point for port-based alumina industries.

The port has invited prospective alumina companies to take part in creating mechanical handling facilities at the WQ-7 berth. Accordingly, Utakal Alumina, which is setting up an alumina plant at Rayagada, has come forward to use the facility for handling of alumina and caustic soda.

According to the MoU between both the firms, the UAIL will have to deposit Rs 10 crore with the Vizag port as an advance and furnish bank guarantee for an amount of Rs 20 crore as a token of its commitment for utilising the facility.

The deposit amount would be adjusted against warfage and port handling charges from the day UAIL begins its operations.

"Any new users are required to provide an advance of Rs 10 crore and a bank guarantee for Rs 20 crore. If the berth is made available to other alumina companies at a later date, the bank guarantee will be adjusted prorata and the bank guarantee of UAIL will be reduced to that extent," port sources told Business Standard.

Apart from this, the port would allot 26 acres of land on a lease basis to UAIL to set up handling and storage facilities for export of alumina and import of caustic soda for a period of 30 years subject to payment of upfront fee and other rentals.