Vedanta, Essar vying for Rs845 cr Vizag port upgrade deal

The London-listed Vedanta Resources and the Essar Group are competing for a Rs845-crore ore handling complex (OHC) project at Visakhapatnam Port in Hyderabad, according to a report.

The OHC project would be awarded on a design, build, finance, operate and transfer (DBFOT) basis after the necessary approvals come from various government agencies, according to a PTI report from Hyderabad citing a port official.

The project involves upgrading of the existing terminal as well as the creation of a new facility at a total cost of nearly Rs845 crore, including Rs170 crore as upfront fee to the port.

"The Planning Commission had given its consent for the project in February. We have sent the proposal to the ministry of shipping and from there it will go to the Cabinet Committee on Economic Affairs.

"We will have to get security clearances from the home ministry also. We have Vedanta and Essar as the bidders. It will take two to three months to award the 30 year-contract to the bid winner," the official said.

The present OHC at the port, mainly for iron ore, is of 12 million tonnes capacity. With the expansion it may go up to 23 tonnes, the official added.

The shipping ministry had set a target of 70 million tonnes for Vizag port for all commodities in 2012-13.

The capacity of the port of Visakhapatnam is 67.33 million tonnes as on 31 March 2013 and the envisaged capacity is 140 million tonnes and 149 million tonnes by 2016-17 and 2019-20 respectively.

The investment proposed for various capacity enhancement schemes is Rs13,940 crore, of which about Rs 7,100 crore is proposed to be funded through public-private partnership (PPP) in three phases.