Adani Ports keen to enter Maha, AP, K'taka and foreign nations

Adani Ports is keen to complete its own 'Sagarmala' dream by having presence in the three key states of Maharashtra, Karnataka and Andhra Pradesh, apart from setting up trans-shipment terminals in Southeast Asia and East Africa, a top company official said.

Adani Group, which began work on its first international trans-shipment container port at Vizhinjam near here yesterday, now operates nine ports which would have an installed capacity of 490 million tonnes (MT) by the next fiscal. With this, the Adani Ports and Special Economic Zone (APSEZ) becomes the country's largest ports operator in the private sector.

The Gautam Adani-led company would be closing the year with having handled 144 MT cargo out of its present installed capacity of 390 MT.
The company has set a target of exceeding 200 MT of cargo handling by 2020 at an investment of Rs 9,000 crore, but it is likely to achieve it by 2018.

"Our focus will be having presence in these three states of Maharashtra, Karnataka and Andhra Pradesh, so that our nine ports are better served and our own 'Sagarmala' plan is fulfilled.

"We are also keen to have trans-shipment terminals in Southeast Asia, especially in Myanmar and Bangladesh, and also in East Africa, so that these facilities can serve the upcoming Vizhinjam facility, which can compete on cost with the Colombo and Singapore ports, which handle more than 80 per cent of the country's international trade," Karan Adani, Executive Director of the APSEZ and son of group Chairman Gautam Adani, told PTI here.

The government has embarked on an ambitious project of port development across the country's over 7,000-km-long coastline and named it as the 'Sagarmala Project', for which it has committed Rs 70,000 crore in investments.

On the poor performance of the Vallarpadam trans-shipment terminal, which is the country's first such facility, Adani said, "If you charge more than double the rates at Colombo (120 per cent more), what do you expect?"

"Our Vizhinjam strategy will be cost-led and we are confident that we can beat Colombo and other nearby ports on costs," Adani said, adding the new port will be operational in three years from now.

The port would have capacity of 1.5 MT before starting the second phase, which would increase it to 2.2 MT. The capacity would be further raised to 3 MT in the third phase.

In a major boost to the Vizhinjam port, Union Shipping Minister Nitin Gadkari, while attending the ground-breaking ceremony here last evening, announced that the controversial cabotage laws will not apply to the port.

It may be recalled that the Vallarpadam trans-shipment terminal at Kochi, which is the country's first such facility commissioned in February 2011, is utilising only around 30 per cent of its capacity.

Some of the reasons for the poor show are the stringent cabotage laws, which prevent international ships from operating in domestic waters, and also the tariff fixation policy of the government, which does not allow ports to fix tariffs independently.

The government had, in 2012, allowed a three-year cabotage exemption to the Vallarpadam port which expired in September this year. The government is yet to take a call on a full exemption.

Adani said the Mundra port already offers trans-shipment facilities to Pakistan for its cargo coming from East Africa. Last year, the port had handled around 4 lakh tonnes of trans-shipment cargo for the country's western neighbour, he added.

The company's flagship port at Mundra is the fastest- growing port in the country. Its other ports and terminals include Dahej, Hazira and Tuna Tekra, Kandla in Gujarat, Dhamra in Odisha, Mormugao in Goa and Visakhapatnam in Andhra Pradesh.

It is set to buy the Kattupalli port in Tamil Nadu and is developing Ennore port near Chennai, and is also building the Rs 7,525-crore Vizhinjam port in association with the Kerala government.

The Mundra port has crossed the 100 MT mark in cargo handling in FY 2013-14. Karan Adani said his domestic strategy "will be developing greenfield ports as existing ports come at a hefty premium. Similarly, international plans will serve the domestic operations as it makes no sense to have a standalone port in a foreign land. At the end of the day, we want to be an Indian company serving India. Our strategy will be India-driven."

Adani said the APSEZ is also the largest dredging operator in the country with 18 dredgers in operation today, out of which 14 are cutters.

He also said the company is keen to get into the inland waterways ports business if conducive policies are in place, but was quick to add that nothing has been finalised.

On the reports that his company was interested in snapping up the Gangavaram port in Andhra Pradesh, he said the asking price is too high. "So, probably, we will go in for a greenfield port and pay a high premium to buy an existing one in the state," Adani added.

When asked whether the company had finalised any location in any of these three states where it is keen to have a presence, he said Maharashtra looks distant now, as there are no available places and probably, he will bid for the proposed New Mangalore port as and when the government invites operators.

On the group's interest in the defence sector, he said the group is very clear it will not get into defence manufacturing on its own, but it is ready to share its facilities for a joint venture.

Adani also said the company is looking at more LNG and LPG terminals to add to its existing facilities at Dhamra and Mundra.

The APSEZ counter had closed down 1.5 per cent on Friday at Rs 255.45 on the BSE, against a 0.96 per cent fall of the Sensex.