Bangalore: Ennore Port Ltd, which runs the only corporate port owned by the Union government, will raise up to Rs300 crore through private placement of shares to part finance expansions, abandoning earlier plans for an initial public offering (IPO).
The port would place 10% of its equity with state-owned firms such as Life Insurance Corp. of India and General Insurance Corp. of India, according to Rakesh Srivastava, joint secretary looking after ports in the shipping ministry.
The proposal has been cleared by the port’s board and is waiting for the government’s approval, said Srivastava, who is also a member of the board.
The port plans to raise its cargo-handling capacity to 41 million tonnes (mt) by 2012 at an estimated cost of Rs3,324 crore.
Of this, private firms are expected to invest some Rs2,576 crore to set up facilities to handle cargo such as coal, iron ore, liquids, containers and automobiles.
Ennore port would have to invest the remaining Rs748 crore for infrastructure such as deepening the water channel and for rail and road connectivity.
The port, 20km from Chennai port, was set up under the Companies Act, keeping it outside the scope of the Tariff Authority for Major Ports, the tariff regulator for 11 of the 12 ports owned by the government.
Ennore port has a major opportunity to become a new- generation port on the east coast, according to HPC Hamburg Port Consulting GmbH and Consulting Engineering Services (India) Pvt. Ltd, which advised the 12 government-owned ports in preparing business plans.
The Ennore port, set up primarily to handle cargo such as iron ore and coal, started operations in June 2001 and handled 11.5 mt of cargo in the year ended 31 March. The 12 government-owned ports together handled 530 mt of cargo, or some 72% of the 730 mt of cargo shipped into and out of India in 2008-09.