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R-Adag may build India’s largest terminal

R-Adag may build India’s largest terminal
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First Published: Tue, May 05 2009. 12 32 AM IST
Updated: Tue, May 05 2009. 12 32 AM IST
Mumbai: Reliance-Anil Dhirubhai Ambani Group, or R-Adag, controlled by billionaire industrialist Anil Ambani, may be interested in developing the country’s largest container terminal that is to come up at the Jawaharlal Nehru Port Trust, or JN Port, in Navi Mumbai, and which will cost an estimated Rs6,700 crore. A Mumbai-based consultant to infrastructure projects said the cost could increase to Rs12,000 crore. He did not want to be identified.
Reliance Industries Ltd, or RIL, the country’s largest company by market value that is led by Anil Ambani’s estranged elder brother Mukesh Ambani had earlier planned to bid for the same project but later bought a 65% stake in Rewas Port Ltd from Mumbai-based Amma Lines Ltd. Rewas Port Ltd is developing the Rewas port, also in Navi Mumbai. RIL’s interest in the container terminal at JN Port and its acquisition of the stake in Rewas Port have both previously been reported in the media.
RIL has now delayed its plans for Rewas Port by at least two years due to the economic slowdown and delays in land acquisition, said a person familiar with the development who did not want to be identified.
A spokesperson for RIL declined comment on either the delay or its earlier plans to bid for the terminal at JN Port.
In 2005, when the two brothers divided the Reliance empire between themselves, they also signed a non-compete agreement that ensured that one would not directly enter into businesses that the other was in.
Theoretically, the container terminal and the port are separate projects, but are in the same industry—logistics.
If R-Adag bids for and wins the right to develop the terminal, it will have to pay for the cost of this development while JN Port will provide land and infrastructure and pay for dredging costs.
RIL, on the other hand, will build a new port with its own terminals for containers, dry bulk and tankers.
However, the two terminals will likely compete directly with each other. What’s more, the two ports are practically next to each other: the Rewas port is a mere 10km by land from JN Port.
A senior executive with JN Port confirmed that R-Adag has shown interest in the port project apart from international firms such as Singapore-based PSA International Pte Ltd and French shipping line CMA CGM. He declined to be identified.
An R-Adag spokesperson declined comment. However, a senior executive at the group, who spoke on condition of anonymity, confirmed that R-Adag has shown an interest in JNPT’s project. “...we are keen to participate in the largest infrastructure projects in the country,” he said.
U.K. Sharma, chief manager (port planning and development) at JN Port, only said the deadline to submit the request for qualification has been extended from 30 April to 1 June.
“If Anil Ambani manages to win the bid to develop fourth container terminal at JN Port, then he will be getting access to readymade infrastructure and gain benefits arising out of the export processing zone developed by the port,” said the person familiar with the development—the same one who spoke of the delay at Rewas.
According to JN Port’s website, various market projections show that the port will need to handle around 8 million twenty foot equivalent units (TEUs) of container traffic by 2015-16. A TEU is the industry measure of capacity, and is the standard size of a container.
The first of Rewas port’s three-phase development—estimated to cost Rs5,114 crore, with 10 berths with a capacity of 55 million tonnes (mt) of cargo annually—was to start operations on a 50-year contract beginning October 2010. The port is also expected to have a container terminal with 2.6 million TEUs annual capacity.
RIL’s proposed SEZ—the Navi Mumbai Special Economic Zone, which is promoted by RIL and infrastructure developer Jai Corp. Ltd has also been delayed.
India, Asia’s third largest economy, plans to invest Rs91,334 crore through 2012 to raise its cargo capacity at ports to 1,590mt annually by 2012 from the current 757mt. Of this, Rs65,532 crore is to be invested by the private sector.
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First Published: Tue, May 05 2009. 12 32 AM IST
More Topics: Anil Ambani | Reliance | Mukesh Ambani | R-Adag | RIL |