Posco explores usage of Paradip port facility

BHUBANESWAR: With its proposed captive port project at Jatadhari running into rough weather, Posco on Thursday held talks with Paradip port officers to explore possibilities of using the latter’s facilities in case its mega steel project materializes in Jagatsinghpur district.

A team from Posco, led by the company’s deputy managing director H C Ryu, discussed the company’s possible cargo requirements with Paradip Port Trust chairman G Jagannath Rao and other senior port officers at Paradip. “We decided to form a joint team with three members each from both sides. The team would study the facilities in our port, Posco’s needs and then submit a report.

Sources said the joint team is expected to undertake its study between April 2 and 14. Rao had met Posco chairman-cum-managing director Yong-Won Yoon here on February 28 and proposed the South Korean company to consider using the facilities at Paradip port, a central government undertaking, instead of setting up its own captive port at Jatadhari, around 10 km from Paradip. “Our port is old and there would be no depreciation costs. Hence, our rates will be comparatively cheaper for Posco,” he explained.

Posco exploring new options for port and raw material almost coincides with an inter-ministerial meeting organized by the Union government in New Delhi earlier this week to sort out issues like special economic zone for the company’s project.

While Posco’s bid to access the Khandadhar iron ore reserves in Sundergarh district is locked in litigation, its proposed captive port at Jatadhari is facing resistance from different quarters on grounds that it would cause ecological damage and also adversely affect the prospects of Paradip port.

Worried about lack of raw material linkage, Posco has reportedly held talks with Thriveni Earthmovers Private Limited, which is the raising contractor for at least six mines in Keonjhar district, for supply of iron ore in case its steel plant becomes operational.

Thursday’s meeting came a fortnight after Posco-India’s CMD blamed the Odisha government for delay in lifting police restrictions on entering its steel project site in Jagatsinghpur and expressed the need to resume infrastructure and other works at the earliest. It was for the first time that the steel major hit out at the state government since signing an MoU with it in June 2005 for setting up a 12 million tonne per annum (MTPA) unit near Paradip. Yoon said the delay in establishing its steel plant could lead to about 20% cost escalation for the project, which was initially estimated at 12 billion US dollars.

Unhappy with Posco blaming it, the state government had reiterated its support for the country’s biggest FDI project and asked the steel company’s bosses to come for a discussion. The meeting is yet to take place, official sources said.

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A six-member committee, consisting of three members each from Posco India and Paradip Port Trust (PPT) authorities will be constituted to examine feasibility of raw material imports by the South Korean steel major through this major port.

The decision to form the committee follows parleys between Posco India and PPT authorities on Thursday.

“It has been decided to form a committee consisting of six members — three from Posco India and three from PPT to conduct survey regarding the facilities and infrastructure available at the major port for meeting cargo imports and exports for the proposed Posco steel project. The survey will be taken up from April 2-14. Following the compilation of survey report, second phase of discussions will begin between the two sides,” PPT sources said.

A four-member team of Posco India officials led by the company’s deputy managing director Ho Chan Ryu visited the Paradip port on Thursday and interacted with the PPT chairman G J Jagannath Rao and other port officials.

During the negotiations, the port officials explained at length about the available facilities and infrastructure and also the future expansion of the port.

“The first round of discussions between PPT and Posco India was held on Thursday in Paradip. The steel company had sent its team to study our facilities and we expect good response from Posco for using our port in cargo handling,” said deputy chairman of PPT Anant Kumar Bose.

During discussions, Posco officials clarified that the company would be importing about 25 million tonnes of raw materials for the proposed 12 million tonne per annum (mtpa) steel plant in Paradip. Phase-I of the mega steel plant with an envisaged capacity of four mtpa was expected to be operational by 2016.

Posco was keen on using infrastructure of Paradip port for meeting the cargo requirement of its steel mill.

Last month, the PPT chairman, through a written communication, had given a proposal to Posco India, stating that the port had adequate infrastructure to meet the steel maker’s cargo requirement. Earlier, the PPT chairman had also interacted with Posco India CMD Yong-Won Yoon regarding use of two berths by the steel company.

It may be noted that Posco India had proposed a captive port facility at Jatadhari Muhan in Jagatsinghpur district within 10 km of the Paradip port. The location of the port in close vicinity of the Paradip port had raised concerns about its impact on the major port’s operations.

The state government has asked Posco India authorities to submit detailed project report (DPR) for the port prject.

The Union ministry of environment & forests (MoEF) had already given its nod for the captive port of Posco India.

[Source – Odiaa.com & Business Standard]

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