WebSify
Follow us on
Mail
Print

Exit of original promoters delaying port projects: CAG

Source : BUSINESS_STANDARD
Last Updated: Wed, Dec 12, 2012 21:37 hrs

At a time when the progress of non-major port projects has been seemingly derailed due to pull out of original promoters from the ventures, the office of the Accountant General (AG)-Odisha has questioned the role of the state government on the matter.

The AG has sought an explanation from the state commerce & transport department on the circumstances leading to the original promoters exiting port projects and its impact on port development.

“After fulfilling the criteria and signing of the concession agreement, the key partners exited from the consortium for which the port projects were delayed due to lack of monitoring by the government. The reasons of the exit and its impact for development of ports may be stated,” office of AG-Odisha, wrote to secretary, commerce & transport department.

The audit team of AG - Odisha found out that original promoters of Dhamra, Gopalpur and Subarnarekha port companies exited from the consortium of promoters after signing a concession agreement with the government.

The Odisha government had entered into MoU for Dhamra port in March 1997, when key promoters were International Sea Ports Ltd (ISPL)-Singapore and bangkok-based Precious Shipping Company Ltd. The port resumed commercial operations in May 2011, 14 years after the pact.

Currently, the Dhamra port is being developed by Dhamra Port Company Ltd (DPCL), a 50:50 joint venture between L&T and Tata Steel. There is speculation of L&T selling its entire stake in the venture.

In 1987, the Odisha government had established Gopalpur as a seasonal anchorage port. In 2006, it handed it over to the Gopalpur Port Ltd (GPL), a consortium of Odisha Stevedores Ltd, Noble Group and Sara International with equal share. After Noble group exited the venture, there is speculation of Jindal Steel and Power Ltd (JSPL) replacing Sara International as key partner. The port is expected to be commissioned in March 2013.

Similarly, Subarnarekha Port company had signed an MoU with Odisha in December 2006 when SREI Venture Capital was its original promoter with 70 per cent share. After it decided to walk out from the project, Chennai-based Creative Port Development Limited (CPDL) entered as promoter. The port project is yet to take off due to problem in land acquisition.

The state government officials said exiting of the key partners was business decision of the respective investors and the government did not have any role to play in it. It even ruled out any violation of rule due to exiting of the partners.

“The original promoters quitting port projects does not violate the concession agreement if their combined stake stands at 51 per cent till the port begins commercial operations,” said a senior official of commerce & transport department.

However, he said a joint verification of assets of Dhamra, Gopalpur and Subarnarekha ports by audit and state government officers is in the offing.

“The modalities of field visits are yet to be finalised,” added the official.

Asked if the department was planning to amend the concession agreement, he said, “Amendments are being done as and when required. If there is a need, we will amend the concession agreement further.”

In order to take advantage of its vast 480-km coastline facing Southeast Asia, the state government had identified 14 potential locations for the development of minor ports in the state.

The locations identified for the development of the minor ports are Inchuri, Bahabalpur and Bichitrapur in Balasore district; Jatadhari Muhan in Jagatsinghpur district, Barunei Muhan and south of Barunei Muhan in Kendrapara district; Chudamani in Bhadrak district, Palur and Bahuda Muhan in Ganjam district and Astaranga and Baliharchandi in Puri district.



blog comments powered by Disqus
most popular on facebook
talking point on sify finance