Dhamra Port project underway, Tata Steel reports profit of Rs 3,804 crore in Q2
Port to start full-fledged operations by January 2011
BY Rachita Arya
The controversial Dhamra Port Project, a joint venture between Tata Steel, India's largest private steel producer and Larsen & Toubro (L&T), India's largest private engineering and construction company, is expected to start full-fledged operations by January 2011, according to Hemant Nerurkar, managing director (MD) of Tata Steel.
The project was earlier scheduled to be in operation by November 2010, but has been delayed due to one reason or the other.
Speaking to Tehelka on the sidelines of Tata Steel second quarter (Q2) results, the MD pointed out that the port was fully ready with all the necessary infrastructure in place, except for the completion of the rail connectivity link to accommodate large ships. "As of now small ships and cargo are utilising the port on a trial basis,” Nerurkar said.
Dhamra Port, being the deepest port in India with a draught of 18 metres, can accept huge vessels up to 180,000 dead weight tonnage. The master plan is to have 13 berths with a combined capacity to handle 109 million tonnes of cargo in subsequent phases of expansion.
Despite being the 'anchor customer' of Dhamra Port, Tata Steel would use 5 million tonnes capacity, while the rest would be used by other customers from Odisha, West Bengal and Jharkhand.
The port at Dhamra, is situated between Haldia (West Bengal) and Paradip (Odisha), and has the potential to become a hub port for both dry bulk and containerised cargo. The port's ideal location, in close proximity to the mineral reserves of Odisha, Jharkhand and West Bengal, is expected to result in significant advantages for industries in steel, power and mining sectors.
For the past seven years, Tata Steel and Larsen & Toubro (L&T) promoted Dhamra Port, has been facing a fierce campaign by environmentalists. Campaigners have allegedly put up several hurdles which have delayed the project. Green groups have also alleged violations of environmental norms, including the port's proximity to the Bhitarkanika National Park and Gahirmatha Marine Sanctuary.
Dharma port first existed in the year 1800, as a small port receiving ships from Bengal during the British Raj. Recently, the Dhamra Port authorities have urged the state government to help operationalise the 62-km rail link from Bhadrak to Dhamra, constructed at an estimated cost of Rs 777 crore.
As for the results, Tata Steel group reported profit after tax of Rs 3,804 crore, an improvement of Rs 8,720 crore. The group’s profit after tax for Q2 FY ’11 at Rs 1,979 crore was around 8.5 percent higher than the profit in Q1 FY ’11. Going ahead, the company plans to raise Rs 7,000 crore, "when the market is right,'' the MD said. The vehicle for raising this is yet to be decided as the firm awaits confirmation from SEBI on the same. The proceeds of the funds would be used for capital expenditure, the MD pointed out.
Company officials added that they would be comfortable with a debt equity ratio of 1:1. They added that they planned to achieve this by better earnings and debt repayment in the coming quarters.