Dredging Corporation of India Ltd has recently begun work on the Rs 253-crore capital dredging project of Paradip Port Trust. Confirming the development, a senior port official told Projectmonitor that the project involved deepening the existing channel from the existing 12.5m to 16m by dredging a volume of 15 million cubic metres. "All issues relating to cost overruns have been resolved," he said.
The project has faced delays with tenders first floated in December 2005. The project that was to cost Rs 117 crore would now cost Rs 253 crore. The cost escalation was approved last year by the Cabinet Committee on Economic Affairs after which DCI was given the work order as it had emerged L1 from amongst five contenders.
The channel is being deepened to provide draft to the upcoming coal and iron ore terminals that are being developed on BOT basis. It will enable handling of super panmax vessels (1.25 lakh dwt) as against the maximum of 65,000 dwt now.
In a related development the Tariff Authority for Major Ports has approved the tariffs for the upcoming berths. Paradip Port Trust will now seek clearance from the Public Private Partnership Appraisal Committee before requests for proposals are invited from shortlisted bidders. PPT has targeted to finalise the developers by December this year.
Around 17 entities are in the fray for the two new berths, which is also Paradip Port Trust's first attempt at creating new capacity through private participation. The two berths will each have a capacity of 10 million tonnes per year, and are likely to come up in the next two years. The iron ore berth will cost Rs 500 crore while the coal facility will see an investment of Rs 480 crore.

Prospects for 2008-09
The Centre has set a cargo handling target of 55 million tonnes for Paradip Port Trust for 2008-09. A port official, on condition of anonymity, said that the port trust had contested this target and had pressed for a downward revision. Explaining the situation, the official said that Paradip Port was the only major port that did not deal with crude oil - a commodity that has been responsible for a large share in the growth of major ports' cargo. PPT is expected to begin handling crude oil when the single point mooring of Indian Oil Corporation Ltd at Paradip is commissioned in the next two years. Once this happens, cargo volumes at PPT will be bolstered by around 15 million tpa with a possibility of the east coast port turning into a petroleum hub.
In the medium to long term, several mega steel projects are expected to commission in Orissa. This will give a fillip to handling of iron ore and coal - two key inputs in steel making. In 2007-08, the east coast port enjoyed a 10.2 per cent growth in cargo handling, at 42.438 million tonnes. In the first quarter of 2008-09, the port handled 11.303 million tonnes of cargo, up 17.3 per cent from 9.636 million tonnes in the same quarter last year. Paradip Port currently accounts for around 8 per cent of the total cargo handled by major ports. Fertilisers, iron ore and coal fertilisers today account for a large proportion of cargo handled.