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Paradip Port Trust defers plan to build deepwater port

Friday, 14 Feb 2020
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The Paradip Port Trust has deferred its plan to build a new deepwater port in its outer harbour with an investment of Rs 8,767 crore due to viability concerns. The port has a capacity to handle 140 million tpa. The outer harbour project was not found viable in the techno-economic project report.

The proposed outer harbour port project located adjacent to the south of the existing harbour was designed as a satellite port of the Paradip Port Trust and was to be set up as a major port under the Companies Act.

A special purpose vehicle (SPV) was to be set up by the Paradip Port Trust and other government entities, including the Odisha government, the Sagarmala Development Corporation and Coal India (CIL) to implement the project.

The proposed outer harbour port was to be developed under the landlord model, wherein the basic infrastructure, such as breakwater, capital dredging, reclamation, rail and road links, water and power connection and harbour crafts, will be arranged by the SPV.

The cargo handling terminals and associated facilities, comprising berths, stackyard development, equipment and utilities, were to be developed under public-private partnership (PPP) mode. The existing port cannot be deepened further to handle capesize carriers, which will lower coal logistics costs, particularly for the import of coking coal used by steel plants.

The Paradip Port Trust currently has the capacity to handle 239 million tonne of cargo. In FY19, it handled 109.28 million tonne. The outer harbour project was conceived to cater to the rising demand for the movement of coal for CIL, in line with CIL’s plan to raise production to one billion tonne.

Out of this, 250 million tonne of coal will be produced by Mahanadi Coal Fields (MCL), which currently produces only about 140 million tonne. The existing railway system does not have adequate capacity to evacuate an additional 110 million tonne of coal to the power generators located in Andhra Pradesh, Tamil Nadu and Gujarat.

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