Two investors at Ennore Port are at loggerheads to handle coal, a commodity that is witnessing a whopping 42 per cent growth. Sical Iron Ore Terminals Ltd, which wants to handle coal at its iron ore terminal at Ennore port, is facing opposition from Chettinad International Coal Terminal, the developer of coal terminal at the same port.
Each of these investors has put in about Rs 400 crore to develop their terminals, according to Government estimates. Both iron ore and coal terminals, developed on a public private partnership (PPP) basis, were commissioned at Ennore port about a year ago on January 28, 2011.
IRON ORE DOWN, COAL UP
Thereafter, coal traffic at the port has soared while iron ore traffic has vanished, owing to external market conditions.
Operations at iron ore terminal have been hit because of the ban on export of iron ore in Karnataka.
For the April-December 2011 period, Ennore Port did not handle any iron ore traffic. Following this, the iron ore terminal investor - Sical Iron Ore Terminal - has sought respite from the Government.
Meanwhile, Ennore Port has seen robust growth in coal traffic.
The port handled about nine million tonnes of coal during April-December 2011, which shows a 42 per cent growth year-on-year.
The growth has been supported by a decision of the Madras High Court to shift dusty cargo– including coal and iron ore – from Chennai to Ennore.
INVESTORS
The right to develop and operate the iron ore terminal for a 30-year period was won by Sical Iron Ore Terminals, a consortium of Sical Logistics, MMTC and Larsen and Toubro Infrastructure Development Projects. The consortium has won the rights to develop 12 million tonne a year (mtpa) capacity in two phases at the port. Currently, it has commissioned six mtpa capacity.
The concession agreement was signed in 2006, when prospects for iron ore traffic were high.
The rights to build and operate the coal terminal with a capacity of eight mtpa are with Chettinad International Coal Terminal (P) Ltd, a consortium of South India Consortium Ltd, Portia Management Services and Navayuga Engineering.
“The developer of coal terminal has pointed out that the Ministry cannot consider allowing a competing facility to come up within the first few years, as per the concession agreement with the Port,” Mr Rakesh Srivastava, Joint Secretary, Shipping Ministry, said.
ENNORE PORT VIEW
“Chettinad consortium does have an exclusive right to handle all coal traffic, which is not meant for use by the Tamil Nadu Electricity Board (TNEB). But, the iron ore export terminal is also a common user capacity lying idle.
So, something has to be worked out,” the Ennore Port Chairman, Mr S. Velumani, told Business Line .
Ennore Port created 16 mtpa coal terminal facility ten years ago to handle TNEB coal.
This terminal is now using only about 50 per cent of its capacity. The concession agreement – which is contract between port develop and the port trust - provides an assurance to investors in port that no new competing facility will come up within the first few years. A final decision on the issue is yet to be taken.