India: Essar Ports Secures Iron Ore Berths Construction Contract

Essar Ports Limited (EPL), through its wholly owned subsidiary Vadinar Oil Terminal Limited, has emerged as the highest bidder by quoting 31.01% revenue share for mechanization and operation of three iron ore berths (two outer harbour berths and one inner harbour berth) at Visakhapatnam port on Build-Operate-Transfer (BOT) basis for a concession period of 30 years. These three berths will have a combined capacity of 23MMTPA.

This will be a big boost to third party cargo handling and revenue of EPL as it will handle 17MMTPA of third party cargo and 6MMTPA of Essar Steel cargo. EPL believes in the potential of iron ore export and coastal movement through the east coast of India. On commissioning of this project, EPL’s total capacity for iron ore export at the east coast will become 39MMTPA with four highly mechanized iron ore berths (three in Visakhapatnam port and one in Paradip port).

EPL can start the operation of the two outer harbour berths within the next 3-4 months as the upgradation and operation at the terminal will go simultaneously.

Vishakhapatnam port handled 12.3 million tonnes of iron ore during FY13 in spite of slump in iron ore export in India. Bulk of this volume will be captured by these three berths after the mechanization as outer harbour berths will be capable of berthing super Capesize vessels of 200,000DWT and inner harbour berth will be capable of berthing Panamax vessels of 80,000DWT.

Commenting on this, Mr Rajiv Agarwal, Managing Director, Essar Ports, stated, “This project will significantly increase the third party cargo handling of Essar Ports by contributing 17MMTPA of cargo. This will add to our continuous efforts towards developing modernized world-class terminals and serve new customers. This project will significantly increase the efficiency of Visakhapatnam port thereby increasing its competitiveness and facilitating industrial growth in the region.”

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Essar Ports, June 3, 2013