Dhamra Port mulls sale of its export terminal

The Dhamra Port Company Ltd (DPCL), a joint venture of Larsen and Toubro and Tata Steel is reportedly mulling to sell a section of its facilities.

Sources said the Adani Group of Gujarat, which operates ports in many parts of the country, is interested to buy the export terminal of the Dhamra Port as it has been lying idle since September last after the port was dedicated to the nation by Chief Minister Naveen Patnaik.

The Dhamra Port’s export terminal is idle owing to the slump in the export of iron ore from the Odisha as well as from the country as a whole. The terminal has loaded about 2 lakh tonnes of iron ore in the first eight months of its operation though it is equipped to handle about 13.5 million tonnes per year.

Now, the DPCL has mandated the Kotak Investment Banking to find a buyer for the export terminal.

If a transaction with the Adani group materialises, it would help the group strengthen its presence on the eastern coast of India, besides helping its commodity trading business. The group is using the Paradip Port for import of huge quantities of coal. Since the last two months the Adani group’s imported coal has been piling up at the Paradip Port.

The sources said the DPCL could be under pressure from its bankers, who have financed it to a tune of `3,000 crore for construction of its port, for repayment of the loan.

The Dhamra Port also runs a coal import terminal that has a capacity to load 13.5 million tonnes of cargo a year. The terminal has imported about 6 MT since it began operations in May for its customers, including Tata Steel, Bhusan Steel and Power and Usha Martin Industries.

The DPCL was awarded the rights to develop and operate a port at Dhamra for 30 years by the Odisha Government in 2004. The contract can be extended for two additional periods of 10 years each. The `3,200-crore first phase of the port began commercial operations from two fully-mechanised berths capable of handling coking and thermal coal, steam, limestone and iron ore.

However, the port has to develop facilities and infrastructure to attract more importers and exporters. So far, the port is connected with a narrow road from the National Highway-5 from Jamjhadi, which is difficult for port users to approach it. The port town does not yet have good hotels for accommodation of port users.