Gopalpur port project on track despite Noble's pullout

BHUBNESWAR: Progress of work in the Rs 2500 crore Gopalpur port project will not be affected with the exit of Hong Kong-based Noble Group Ltd [GL] from the consortium of three companies that signed a pact with the Orissa government in 2006 to develop the port into an all-weather port.

“The port will be fully operational by 2012, Gopalpur Port Limited (GPL) managing director Mahimananda Mishra told “The ET” on Friday.

The Noble Group Ltd with a turnover of $ 4 billion has recently written to the state government seeking approval for its exit as it is not involved in the project. Government officials said here that two other members of the consortium will take the project forward.

A consortium of three leading business houses – Orissa Stevedores Ltd (OSL), Sara International Limited (SIL) and Noble Group Limited (NGL) – had signed a memorandum of understanding (MoU) with the Orissa government in 2006 to build Gopalpur port on build-own-operate-share-transfer (BOOST) basis.

Richard Elman, executive chairman of Noble Group, Sunday said in a public notice that the group has sought approval from the government for its exit. In an advertisement published in a section of local media here, the group also said it has communicated its decision to terminate its relationship with the project to the banks and financial institutions who have agreed to finance the project.

“The exit of NGL does not affect the financial position of the project. It will not be an impediment in the way of successful completion of the project in time,” Mr Mishra, who is also OSL managing director, asserted.

Ruling out a new partner in place of NGL, the managing director said OSL and SIL firmly believed that development of the all-weather port would continue as per the set timeline, as the financial position of the company was “very strong.”

The port handled 500,000 tons of cargo, including coal, iron ore, ilemnite and fertilisers, during the last shipping season, registering an increase of 90% over the previous year, the GPL MD said.

SIL director, Mr D.P. Singh, said the NGL stopped being a part of the board since 2007 “because of its global commitments.”

“Our partner NGL parted ways gracefully because of its global engagements and wished the project all success,” Mr Singh observed.

“As per the concession agreement (CA) signed between GPL and the Orissa government, any change in shareholding is only to be done with the prior approval of the latter. The GPL has already applied to the state government for withdrawal of NGL. Since the exit of NGL does not violate any of the provisions of the CA, the state government’s permission is expected shortly,” remarked Mr Singh.

GPL aims at constructing at least three berths to handle more cargo at the port in the next phase of expansion. The Gopalpur port, about 170 km from here, is a seasonal port currently operational from November to March and handles cargo, including iron ore, coal and fertilizer ranging from half a million tons to 0.7 million tons.

The port early this month announced financial closure of Rs.1,400 crore for the first phase of the project to be completed by the end of this year. The port has also signed a loan agreement with a consortium of 11 banks led by Punjab National Bank for a total loan of Rs.848.78 crore.