Adani Ports buys Dharma port for about Rs5,000 crore

Bangalore: Adani Ports and Special Economic Zone Ltd (APSEZ), India’s biggest private port operator, has bought the Dhamra port in Odisha for about Rs.5,000 crore from a joint venture (JV) of Tata Steel Ltd (Tata Steel) and Larsen and Toubro Ltd (L&T) in the biggest deal yet in the Indian ports sector.

“The shareholders agreement will be signed later today (Friday),” at least two people familiar with the deal said, asking not to be named as news of the deal has not been made public yet.

Dhamra Port Co. Ltd (DPCL), the entity that runs Dhamra port, is an equal JV between L&T and Tata Steel.

A spokesman for APSEZ confirmed the development. L&T and Tata Steel could not be reached for comment.

DPCL was awarded the rights by the Odisha government in 2004 to develop and operate a port at Dhamra for 30 years. The port contract can be extended for two additional periods of 10 years each on mutually agreed terms and conditions.

The Rs.3,200 crore first phase of the port, with a capacity to load 25 million tonnes (mt) of cargo, started commercial operations in May 2011 from two fully mechanized berths capable of handling coking coal, steam/thermal coal, limestone and iron ore.

In the year ended 31 March, Dhamra port loaded 14.5 mt of cargo.

Being a port outside Union government control, Dhamra is free to set its own rates. In comparison, rates at the Union government-controlled ports are set by the Tariff Authority for Major Ports, or TAMP.

Located between Union government-controlled Haldia and Paradip ports, Dhamra is one of the deepest ports on India’s eastern coast capable of allowing super cape-size vessels, the biggest of the dry bulk ships with a capacity to load as much as 180,000 tonnes of cargo, to dock.

DPCL won the key environment and coastal regulation zone clearance last year for the second phase of the port that involves constructing 11 more berths to handle an additional 71.3 mt of cargo and one million standard containers a year. The expansion is estimated to cost about Rs.10,016 crore.

When fully operational, Dhamra will have 13 berths capable of handling about 100 mt a year of dry bulk, liquid bulk, break-bulk, containerized and other general cargo.

The deal will help APSEZ ramp up port handling capacity to over 200 mt by 2020.

Mumbai-listed APSEZ, India’s biggest private port operator, is 75% owned by Adani Enterprises Ltd, the flagship business of the Ahmedabad-based Adani Group.

The firm currently has port-operating assets that can load about 115 mt of cargo and most of these are located on India’s western coast, a big chunk of it in Gujarat, the home-state of its billionaire owner Gautam Adani. APSEZ runs ports at Mundra, Dahej and Hazira—all in Gujarat and outside the control of the Union government. The firm also runs a coal loading terminal at Abbot Point in Queensland, Australia.

The firm is also developing facilities at Union government-controlled ports at Mormugao, Vizag and Kandla.

APSEZ has for long been looking for a port on India’s eastern seaboard to replicate its success story at Mundra, a Chennai-based port consultant said. “Dhamra is a perfect fit for APSEZ,” he said on condition of anonymity. Mundra, now India’s biggest private port, handled 101.12 mt of cargo in the year to March.