L&T, Tata Steel JV company "Dhamra Port Company Ltd" achieves financial closure

Larsen & Toubro Ltd has announced that, the Dhamra Port Company Ltd (DPCL), 50:50 joint venture Company of the Company & Tata Steel Ltd, has achieved financial closure for development of an all-weather deep port at a location north of the mouth of river Dhamra in Orissa. The Company has signed the loan agreement at Chennai on February 27, 2007 with a consortium of lenders led by the Industrial Development Bank of India (IDBI) who have agreed to part finance the project cost of Rs 24.6 bn. The Company is working with BNP Paribas for ECA funding.

Sheltered between the main land and the Kanika Sands Island on the eastern coast, Dhamra Port will be the deepest all-weather port of its kind in India with a draught of 18.5 meters, which can accommodate super cape-size vessels up to 180,000 DWT. This will be a boon to the mineral hinterland of north Orissa, Jharkand, West Bengal and Chattisgarh which are in close proximity to the port & where a large number of steel plants and mineral based industries are located besides many more which are on the anvil. The cargo of mineral & mineral based industries being highly freight sensitive, a deep fraught port will be of great advantage as such cargo can move in larger vessels leading to lower incidence of sea freight on the landed cost. The highly mechanized and advanced material handling facilities planned at the port will offer the user loading & discharge rates comparable to the best in the world.

The port project includes a 62-km rail connectivity to the main Howrah-Chennai line at Bhadrak.

The port will eventually have 13 berths to handle over 83 million tons of cargo per annum. Of these the first two berths with a handling capacity of up to 25 mn tons of hulk cargo per annum will come up in the first phase. When fully developed the port will handle all types of cargo such as dry bulk, break bulk, liquid and container cargo. Apart from Tata Steel who is a co-promoter of the port, a number of other steel plants, mines and industries in the region will use the port which is going to become eastern India's major gateway to the world.

The Company's Engineering Construction & Contracts Division will be constructing the modern port with all facilities while International Dredging seaport Company Ltd, a JV of the Company and Dredging international of Belgium, will carry out the dredging work.

Subsequent to the signing of the financing documents, Mr. S K Mohapatra, CEO, remarked "The Dhamra Port is going to be major player in Tata Steel's global plans and aspirations" Mr. H M Nerurkar, Director, DPCL, Vice President (Kalinganagar Project Orissa & Technology) added "The Dhamra Port Project signifies the coming together of the largest Steel industry in the private sector and the largest engineering and construction major. The project is bound to be a successful venture."

Source : Equity Bulls

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