• PAGE ONE
• INDEX
• HOME

Essar group eyeing stake in Hazira dry cargo terminal -- To continue as consortium of Shell India

Vinod Mathew

AHMEDABAD, March 27

THE Essar group would continue as a consortium member with Shell India at the Rs 2,300 crore multi-purpose port terminal at Hazira. However, it would be the dry bulk cargo terminal (four) that the Essar group would be eyeing for equity participation and not the LNG berths, Essar Group sources said on Monday.

According to the Gujarat Maritme Board, the nodal state agency monitoring the project, neither the Essar group nor Shell India Pvt Ltd had indicated any change of status in the consortium membership. The name of the consortium that will promote the proje ct was still labelled Shell-Essar, a State Government officer said.

``At the same time, it must be borne in mind that the Essar group was never the key member of the consortium as both the expertise and money was with Shell. This was evident during various stages of discussion during the past couple of years. Essar seeme d satisfied to lie low till called upon to exercise its option to take an equity stake in the port project,'' the officer told Business Line.

As per the Detailed Project Report (DPR) for the Hazira project, submitted by Shell to the Gujarat Maritime Board (GMB) late last year, there was to be a solid cargo portion of 5.8 million tpa.

The dry bulk cargo portion included iron ore (3.1 million tpa), coal (2.0 million tpa) and general cargo, including HR coil and scrap to the tune of 0.7 million tpa.

This was above the liquid cargo (LNG) proposed to be at 6.5 million tpa, thus bringing the total cargo mix at Hazira to 12.3 million tpa. The Shell India had also floated two wholly-owned subsidiaries - Hazira LNG Pvt Ltd and Hazira Port Private Ltd.

Significantly, it was the State Government that insisted on the high solid cargo content for the Hazira port. Both the bidders for the Hazira terminal, Shell and the Reliance Industries were understood to have been keen on the liquid cargo, to the virtua l exclusion of the dry bulk cargo during the pre-bid days.

The Essar group is understood to have the option to acquire up to 26 per cent equity at the Hazira terminal by the third year of its commissioning. However, if Shell were to concentrate for the time being only on the LNG terminal whose financial closure is expected in another 14 months and commissioning by 2004, then Essar may be in for a long wait.