Dhamra Port Project Phase - I

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In February 2007, the Government of Orissa (GoO) signed a contract of 34 years (including 4 years of construction period) to Dhamra Port Company (DPC) (a joint venture between Tata Steel Ltd. and Larsen & Toubro Ltd.), for the development of an all weather Dhamra port in Orissa . The lease period may however be renewed or extended for two additional periods of 10 years each on mutually agreed terms and conditions. The project was planned to be executed in two phases. The first phase of the port consisted of two berths with a total capacity to handle annually 25 million tpa of bulk cargoes like iron ore and coal. Please note that Dhamra Port port was designated as a minor port. Under the contract, DPC had the exclusive right to design, finance, build, manage and operate the Dhamra Port. Sheltered between the main land and the Kanika Sands Island on the eastern coast, Dhamra Port was designed as the deepest all-weather port of its kind in India with a draught of 18.5 meters, which could accommodate super-cape size vessels up to 180,000 DWT. The port was to benefit the mineral hinterland of north Orissa, Jharkhand, West Bengal and Chattisgarh where a large number of steel plants and mineral based industries were located. The port was designed to eventually have 13 berths to handle over 83 million tons of cargo per annum. When fully developed, the port was expected to handle all types of cargo such as dry bulk, break bulk, liquid and container cargo. The port project included a 62-km rail connectivity to the main Howrah-Chennai line at Bhadrak. The Govt. of Orissa awarded the consortium of Larsen & Toubro Ltd and Tata Steel Ltd, on a negotiated basis, the right to develop the project. The consortium then established Dhamra Port Company Ltd, a special purpose vehicle (SPV), for the execution of the project on a Build, Own, Operate, Share, and Transfer (BOOST) basis. L&T's Engineering Construction & Contracts division was selected to construct the modern port with all facilities while International Dredging Seaport Company Limited, a JV of L&T and Dredging International of Belgium, was selected to carry out the dredging work. The total cost of the project in Phase-I was estimated to be US$ 600 million. The Phase-I of the project reached financial closure in February 2007. A consortium led by Industrial Development Bank of India (IDBI) was to provide a debt of US$ 475 million. The consortium of eight banks headed by IDBI Bank was to provide the rupee loan at 9.75 per cent rate of interest. The construction for Phase-I has commenced in March 2007 and the port is expected to be in commercial operation by March 2011. Phase 1 of the project commenced operations in May 2011 with a capacity of 24 MMTPA (dry bulk) handled in two berths and other associated infrastructure. In September 2014, Dhamra Port Company (DMC) closed financing for supporting the constructions to increase capacity of the port. The 14-year term loan of US$ 68.2mn (INR 4000mn @58.6 INR/USD) was arranged by IDFC Bank. On 17th May 2014, Adani Ports and Special Economic Zone (APSEZ) executed a definitive agreement with L&T Infrastructure Development Projects Limited and Tata Steel Limited to acquire 100% stake in the Dhamra Port Company Limited (DPCL) at an enterprise value of Rs 5500 crores. Following the acquisition, the 2nd phase of development would be initiated within 90 days and completion targeted in 30 months. This continued expansion will allow Dhamra port to exceed 100 million tons of cargo capacity by the year 2020. www.projectstoday.com www.pppinindia.com www.infrastructure.gov.in http://www.dhamraport.com/ Adani is the new sponsor, since acquisition of 100% stake in the project in May 2014.