Proposed Subarnarekha Port in Odisha may spell doom for WB ports 

The proposal to build a high-end port in Odisha could pose crippling competition to two ports scheduled to come up in neighbouring West Bengal

Photo courtesy: Facebook
Photo courtesy: Facebook
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Kingshuk Banerjee

The proposal to build a port in Subarnarekha in Odisha has raised serious questions over the economic viability of two upcoming ports in Sagar and Tajpur in neighbouring West Bengal.


According to sources, the prospect of three ports coming up in close vicinity of one another could spell doom not only for the West Bengal Government’s pet project at Tajpur, but also for the future of the second arm of Kolkata Port on Sagar Island.


A Kolkata Port Trust (KoPT) official said: “There would not be enough cargo to sustain these three ports in close vicinity. Being in the same state, Sagar and Tajpur would struggle to be economically self-reliant. Now, with the possibility of another deep draft port in Subarnarekha, the situation could be very grim for these two upcoming Bengal ports.”


Earlier, the development of the port on the Sagar Island was proposed after slowing down of business at Haldia Port, an arm of KoPT.


WB agrees to give 74% stake to Centre

In an important development, the tussle between Centre and West Bengal regarding the shareholding pattern in proposed Tajpur port got all but resolved after Kolkata finally agreed to offer 74% stake of the project to New Delhi after much deliberations.


The dispute of who gets how much in the project was a big stumbling block hampering progress to reach a final deal. Originally, New Delhi was offered only 26% stake in the Tajpur project, an offer that Centre refused outright. Kolkata was also told that unless the state government agreed to Centre’s terms on the Tajpur Project, it risked losing investment on the Sagar Island as well.


The Tajpur project would be initiated through the formation of a Special Purpose Vehicle (SPV), a specialised type of business entity for carrying out mega projects, according to latest reports.


Challenges remain

There have been many problems associated with the upcoming port on Sagar Island, which has been christened as Bhor Sagar Port.


The consultants of Sagar Port have pointed out that if Tajpur comes up as standalone entity, the economic viability of the former would take a severe beating. With the advent of Subarnarekha port, the situation would get even more difficult, according to port sources.


There has also been a big question mark on finding investors for critical rail and road connectivity over the river for Sagar Island Port.


“If investment of ₹8,000 crore for the railway link and ₹5,000 crore for road connectivity do not come up, Sagar Port would remain a pipe dream,” a KoPT official said.


The official noted that a satisfactory level of rate of return would have to be guaranteed to raise that money.


“The prospect of three ports in close vicinity of one another doesn’t inspire that kind of confidence. Already, the port in Haldia is struggling due to a similar tariff war and, the emergence of Subarnarekha port would just add another dimension to an already bleak picture,” the official said.


Both the proposed Bengal ports would also be at a disadvantage as Subarnarekha Port in neighbouring Odisha could be the preferred choice for bigger vessels, due to its greater draft depth, according to KoPT official.


Subarnarekha Port, which will come up in the Balasore district of Odisha, has got Tata Steel as its majority stakeholder, after Adani Group pulled out of the project. Tata Steel was involved big-time in the port of Dhamra in the state, but exited the undertaking, making way for the Adanis to acquire a majority stake.


It is expected that, with a greater draft depth, Subarnarekha, once in operation, would cater to bigger vessels all year round.


Tajpur Port to cost over ₹4,200 crore

Sources believe that the proposed deep sea port in Tajpur-Sankarpur area could cost up to ₹4,231 crore.


“The port would have nine berths and, be able to handle 60,000 tons of cargo. The 18.8 km-long sea channel would be made for ships’ entry to the port. The project would be completed within two phases,” sources said.


It has been further learnt that Tajpur Port would be built on a patch of reclaimed land. So, there would be no need for new land acquisition.


Tajpur Port would also have a 15-metre draft, whereas the one on Sagar is expected to have a 9 metre draft. Intensive dredging seems like the only way the draft of Sagar Port could be enhanced to 12 metres or more.


According to KoPT sources, earlier it was decided that the construction work on Sagar Island Port would start in 2017-18 and be completed in five years. But after the recent deal with the state, the construction in Tajpur could begin sooner.


Sagar would primarily serve as a coal terminal. For the first phase, it would have a seven-million-ton cargo-handling capacity which could go up to 50 million tons.

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