Pipavav Port to spend $100m to increase capacity by 50%
Aug 03 2014 , Mumbai
The port, now led by Maersk Group's APM Terminals, has already tied up $70 million in external borrowings for the same, while the rest will come from internal accruals.
"We see good demand on container traffic and are already operating at 85% capacity. We will be expanding our capacity to 13 lakh TEUs (standard units) from 8.5 lakh TEUs now," Gujarat Pipavav Port Managing Director Prakash Tulsiani told PTI.
The expansion work involves replacing a crane with a more powerful one and constructing a new yard, which will help in expanding the overall capacity.
All the necessary permissions for the project are in place and it has also achieved a financial closure, he added.
Tulsiani said the bank has tied up a $70 million loan from the World Bank Group member IFC for expansion and the rest of the amount will be internally managed.
The loan is like any other external commercial borrowing and does not come at any softer interest rate, he added.
Tulsiani stressed that the company will be debt-free in a week's time, after a scheduled repayment and raising money through the ECB route will not put strain on the debt to equity metrics.
The port had in April announced a cut in its capacity expansion on both the container and bulk cargo side. While the cut in container capacity was a minor one (from 15 lakh TEUs to the 13.5 lakh TEUs), the one on the bulk cargo was drastic, as it slashed new addition target from the earlier 20 million tonne to 4-5 million tonne.
Tulsiani justified the decision, saying that the question marks over the planned power projects, which would have given the port an opportunity to handle imported coal, resulted in the cut.
The port is also watching the developments in the auto industry, Tulsiani said, adding that it is open to making all the necessary changes to facilitate auto cargo movement.