Hyderabad: Krishnapatnam Port Co. Ltd (KPCL), promoted by Hyderabad-based infrastructure conglomerate CVR Group expects a 40% jump in cargo and revenue in the year ended 31 March despite a slump in iron ore exports due to the mining ban in Karnataka.

KPCL handled 21.12 million tonnes (mt) of cargo in the last financial year, largely driven by coal and to a lesser extent by fertilizers and edible oil imports. Coal alone contributed 76%, or 16 mt of total cargo handled by the port, followed by fertilizers at 1.5 mt, edible oil at 1 mt, farm commodities at 0.9 mt, and barites at 0.5 mt.

Two years back, KPCL handled about 8 mt, or three-fourths of the total bulk cargo handled by the port, primarily due to the iron ore mining boom in Karnataka.

The Supreme Court order banning iron ore mining in the three Karnataka districts in July 2011 on account of widespread illegal mining has put a halt on iron ore exports. Ports including Krishnapatnam that were relying heavily on Karnataka iron ore started facing sustainability issues.

But shortage of domestic coal has led to an ever-greater reliance on imported coal. According to 12th Five-Year Plan (2012-17), India is facing a coal shortage of 185 mt to fire its power plants, and demand for imported coal is growing. India imports about 80 million tonnes per annum (mtpa).

The rising demand for “imported coal and our customer-centric approach helped the port to recover despite the absence of iron ore imports", said Anil Yendluri, chief executive officer of KPCL.

Yendluri said he is confident of the company reporting revenues of around 930 crore in the financial year ended 31 March compared with 630 crore in the previous year.

Adding new liners and destinations, diversification of cargo and the new container terminal which became operational in October helped in revenue growth, Yendluri said.

For 2013-14, cargo handling is likely to be about 30 mt, resulting in a proportionate increase in the revenues, Yendluri said.

Spread across 6,500 acres and located in Nellore district of Andhra Pradesh, KPCL is about 190km north of Chennai. KPCL has so far invested around 7,300 crore, of which it spent around 1,400 crore on the first phase, and another 4,900 crore on the second phase. As of now, the port has 10 operational berths, of which eight are bulk cargo and the remaining were dedicated for container handling.

Under the second phase to be completed next year, the company will add an 11th berth and two jetties for liquefied natural gas (LNG) and petrol and LPG (liquified petroleum gas).

“We are at the finishing stage of phase two," said Yendluri.

Yendluri expects resumption of iron-ore mining in Karnataka soon. “We are yet to have clarity on iron-ore mining in Karnataka but soon things will be resolved," he said.

Iron ore exports will give a “huge boost to the cargo turnover" at the port, said a KPCL official, who declined to be named.

“There will be a huge supply chain efficiency gains. Now railway rakes come empty to be loaded with coal, but once iron ore exports begin, the rakes will come loaded with iron ore, doubling our cargo turnover," the official said.

In 10 years from now, KPCL plans to invest an additional 10,000 crore to add another 32 berths, taking the total to 42 with a capacity to handle 200 million tonnes, making it one of the largest ports in the country.

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