Public-listed Essar Ports Ltd (EPL), one of the India’s largest port operators involved in port and terminal services for liquid, dry bulk, break bulk and general cargo, has acquired Visakhapatnam Port Trust’s (VPT) iron ore handling complex on a build-operate-transfer (BOT) basis, for 30 years, the company said in a release. It paid an upfront payment of Rs 185 crore and will also pay a revenue share to VPT.
The acquisition will enhance EPL's iron ore cargo handling capacity to 23 MTPA over two phases and its east coast iron ore handling capacity to 39 MTPA.
Essar Vizag Terminals Ltd (EVTL), a wholly-owned subsidiary of Essar Ports, will have three berths (two outer harbour berths and one inner harbour berth).
“Enhancing the cargo handling capacity and mechanisation of port facilities for efficient management is crucial for long-term sustenance. We are sure that Essar will develop the OHC facility with latest state-of-art handling facilities and achieve higher loading rate, thereby reducing the overall turn around by at least 50 per cent," said MT Krishna Babu, chairman, Vizag Port Trust.
EPL will invest Rs 1,200 crore to develop the project over three years which will cover the upgrade of outer harbour berths (OB I & II) in Phase I and mechanisation of inner harbour berth (WQ-I) in Phase II.
“The facility is well placed to cater to both the domestic and international steel Industry. It will serve major iron ore consuming countries like China, Japan and Korea in addition to coastal movement within India. The facility has dedicated rail connectivity to India’s iron ore mining belt. This, along with the mechanised CQ III facility in Paradip port, will take Essar Port’s total east-coast iron ore handling capacity to 39 MTPA," said Rajiv Agarwal, CEO and MD, Essar Ports.
Union government-owned VPT, the country's biggest iron ore-handling port, has handled close to 14 MT of iron ore during FY14.
Essar Ports Ltd (formerly Essar Shipping Ports & Logistics Ltd) operates as a sea logistics company in India. It has three operational terminals at Hazira, Vadinar and Paradip, with a capacity of 104 MMTPA. The company aims to expand its capacity to more than 200 MMTPA over the next few years.
Currently, it is building a coal berth of 14 MMTPA at Paradip Port and a 20 MMTPA dry bulk terminal at Salaya in Gujarat besides increasing the capacity of Hazira port by 20 MMTPA.
For the quarter ended in March 2015, the company reported a 15 per cent increase in consolidated net profit to Rs 104.6 crore compared with Rs 90.8 crore in the year-ago period.