A consortium including Noble Group Ltd, Gammon Infrastructure Projects Ltd and MMTC Ltd to develop iron ore terminal at Paradipport on BOT basis
July 1, 2009, New Delhi: A concession agreement has been signed between the Paradip Port Trust and Blue Water Iron Ore Terminal Pvt Ltd for the construction of a deep draught iron ore terminal at the port.
The agreement was signed in the presence of GK Vasan, Union Cabinet Minister of Shipping and other senior officers including APVN Sarma, Secretary of the Department of Shipping, Additional Secretary, Financial Advisor and the Joint Secretary of Ports.
As per the agreement, the iron ore terminal will be developed by the concessionaire at an estimated outlay of Rs 506.30 crore. Paradip Port will provide supporting facilities such as dredging of the channel and berth, railway lines and back-up area at an estimated cost of Rs 85.05 crore.
In addition, the port will incur an expenditure of Rs 20 crore towards shifting the Central Industrial Security Force (CISF) complex and Rs 15 crore for the upgrades of the electrical reception facilities in order to facilitate faster implementation of the project.
On the completion of the iron ore terminal, around 10 million tonnes per annum (MTPA) capacity will be added to the port. Since the dredging of the channel is in progress and the depths of the proposed channel and berth are 17.1 meters, it will facilitate handling of cape size vessels of up to 1,25,000 deadweight tonnage (DWT).
The concessionaire, Blue Water Iron Ore Terminal has offered a revenue share of 36.802% to the port during the concession period of 30 years. The concessionaire will complete the construction of the project facilities within 36 months from the date of the award of the concession.
This is the first project under Public Private Partnership (PPP) to be implemented in the port sector as per the new Model Concession Agreement approved by the cabinet and the tariff has been fixed up front by the Tariff Authority for Major Ports (TAMP).
As part of the PPP scheme of the Government of India, the Paradip Port Trust floated global tenders for the construction of deep-draught iron ore berths on a build, operate and transfer (BOT) basis.
Five bidders were short-listed, including the contract winner, the consortium of Noble Group Ltd, Gammon Infrastructure Projects Ltd and MMTC Ltd. To implement the project, the consortium formed a Special Purpose Vehicle (SPV) - Blue Water Iron Ore Terminal Pvt Ltd -under the Companies Act.
K Raghuramaiah, Chairman, Paradip Port Trust signed the concession agreement on behalf of the Port and Harindar Pal Singh Banga, Vice-Chairman, Nobel Group signed on behalf of the consortium.
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