ISP may pull out of Dharma Port project
By A Business Correspondent
Uncertain is the fate of the Dhamra Port project following an ultimatum served to the Orissa government by the International Sea Ports consortium. The bone of contention is the state government's refusal to provide guarantee to the project.
ISP was selected to build the port on a build, own, operate, share and transfer (BOOST) basis for a period of 30 years in the year 1998.
The consortium has given the government time till this month-end to clear its stand. If the government still refuses to act as guarantor ISP may threaten to pull out of the project.
The MoU for the project signed between the two parties in 1998 and the project was to be implemented in two phases. The cost of the first phase was originally estimated at Rs 1,200 crore, which has since risen to Rs 1,476 crore. ICICI Bank and IDBI had agreed to provide Rs 900 crore and Rs 300 crore, respectively, towards the project. ISP had to arrange the balance Rs 276 crore from technical partners. The consortium, in fact, is willing to bring in Rs 400 crore provided the government agrees to provide guarantee for at least 40 per cent of the project cost.
The project has already faced many setbacks in the past. Stevedoring Services of America, US, one of the consortium partners, pulled out of the project citing inordinate delay in obtaining clearances. Further, the Railways refused to construct a 62-km railway line connecting the proposed port with the existing Haora-Chennai line. With the latest controversy the implementation of the project may well be delayed further delayed, if not scrapped entirely.