The iron ore terminal at Kamarajar port in Ennore, now lying idle, will be modified to handle coal for private firms. The successful bidder will have to invest nearly ₹580 crore in the project.
The terminal’s concessionaire Sical Iron Ore Terminal Ltd can exercise the Right of First Refusal (RoFR) and match the revenue share offered by the highest bidder.
Export banThe iron ore terminal has been idle for five years following an export ban on iron ore. In August 2014, Sical submitted a proposal to Kamarajar Port Ltd (KPL) to modify the existing iron ore terminal to handle common user coal by offering 52.524 per cent as revenue share to the port.
In its board meeting last month, the port decided to call for a fresh tender to identify a developer to modify the terminal to handle common user coal of 12 million tonnes a year on Design, Build, Finance, Operate and Transfer basis, for 30 years. The bidder may have the flexibility to use the facility to handle iron ore also, sources said.
Sical’s proposed revenue share will be the reserve price for financial bids/commercial proposal when the port invites Request for Proposal, sources said. If Sical Iron Ore Terminal exercises its right of first refusal and matches the revenue share offered by the bidder, or if the port does not receive any attractive bid, then KPL will issue a letter of intent to award the project to Sical.
At present, the Chettinad group handles non-TNEB coal at the port and a competing facility cannot handle such coal till February 2016, according to sources.
Kamarajar Port Ltd entered into a licence agreement with SIOTL, a special purpose Vehicle jointly promoted by Sical Logistics Ltd (with 89 per cent stake) and L&T Infrastructure Development Projects Ltd (L&T IDPL) (11 per cent) in September 2006 to develop the iron ore berth to handle 12 million tonne annually.
The project was to be developed in two phases of 6 million tonnes each. Subsequently, MMTC acquired 26 per cent equity stake from Sical Logistics Ltd. The present shareholding of SIOTL is Sical Logistics Ltd (63 per cent), MMTC Ltd (26 per cent) and L&T IDPL (11 per cent).
Phase I of the project was constructed in November 2010. However, due to the export ban, SIOTL could not complete the trial run and load test.