Essar Ports entered into a concession agreement with Vishakhapatnam Port Trust for development and operation of upcoming Iron ore berths at Vizag port.
Essar Vizag Terminals is a subsidiary of Essar Ports, which is a part of USD 39 billion Essar group. The agreement on development of upcoming Iron ore berths is on BOT basis over a period of 30 years.
‘BOT stands for Build, Operate, Transfer, which means a company works on building of any infrastructure project, operates it for a certain period of time (as per the agreement) and transfers it to any other body, after the contract. In Essar’s port case the operating period is of 30 years as mentioned above. The three upcoming Iron ore berths (two outer harbors and one inner harbor) will have a collective annual capacity of 23 MnT’
Total project cost is around INR 12 billion and it’s planned to complete in 3 years. The project aimed to increase overall annual capacity of Iron ore export on the East coast to 39 MnT. Essar ports have collectively 4 highly mechanized Iron ore ports, 3 in Vizag port and the one in Paradip port.
“This project will significantly increase our third party cargo handling capacity and also boost our presence in the east coast. Iron ore export traffic at Vizag will increase substantially due to the competitiveness of this terminal which will facilitate industrial growth in the region”, said Rajiv Agarwal, Managing Director of Essar Ports.
Essar Ports will take over two outer harbor berths and up gradation of terminal will take place concurrently. During FY 13, Visakhapatnam Port handled 12.3 MnT of Iron ore. This traffic is readily available from beginning, for these upcoming Iron ore berths.