Mormugao Port Trust scraps Vedanta deal over delay in environmental nod

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State-owned Mormugao Port Trust has scrapped a contract awarded to a unit of miner Vedanta Ltd in 2016 for re-developing and running three cargo berths due to delay in getting environmental and coastal regulation zone (CRZ) clearances for the project.

Strident public opposition to Mormugao Port Trust’s plan to shift the petroleum, oil and lubricants (POL) cargo handled at berth number 8 — that was to be handed over to Goa Sea Port Pvt Ltd as part of the contract — to Vasco Bay, also led to the collapse of the project, government officials said.

On September 22, 2016, Goa Sesa Port, a unit of Sterlite Ports Ltd, signed a concession agreement with Mormugao Port Trust for redevelopment and operation of berth numbers 8, 9 and 9A (comprising five barge berths) on a 30-year-contract after it emerged the successful bidder in a public auction.

The re-developed berths were planned to accommodate Capesize ships for handling iron ore, coal, limestone, bauxite and other general cargo with a capacity of 19.22 million tonnes per annum.

The appraisal process for environment and CRZ clearances was initiated in February, 2016.
Public hearing

While the environment clearance process dragged, Mormugao Port Trust separately ran into opposition from the public for shifting the POL berth to Vasco Bay.

During a week-long public hearing on the environment clearance process for the planned development of Vasco Bay, villagers opposed the project tooth and nail.

“They said nothing doing,” said a Mormugao Port Trust official. “We realised that the shifting of the POL berth to Vasco Bay was not going to happen. Hence, we were not in a position to hand over Berth No 8 to Goa Sesa because of opposition to the Vasco Bay project,” he said.

As a result, the project awarded to Goa Sesa became unviable, he added. The resistance by the villagers to the development of Vasco Bay also “changed the port’s game plan completely”, the official said.
Viability concerns

The environment and CRZ clearances for the project were finally accorded in February this year. But, by that time, the port trust had decided to scrap the Goa Sesa deal on viability concerns.

The cancellation of the contract did not entail any financial loss to either parties because the port trust did not fulfil its obligation on securing environment clearance while Goa Sesa did not achieve financial closure for the project.

The port trust is now re-modelling the project with only Berth number 9 and three barge berths, which will be re-developed by a private firm as general cargo berths. It will continue to run Berth Number 8 (POL Berth) which has become attractive to the port as Goa’s fuel supplies are fully shipped through this facility.

“POL handling is very much beneficial to the port in today’s scenario. The Tariff Authority for Major Ports (TAMP) has given very good rates for handling cargo at Berth number 8. The port is earning about ?40 crore annually from this berth. It is our bread and butter now,” he added.
Source: The Hindu Business Line

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