RIL's Rewas port project faces delays

Reliance Industries Ltd. | Refineries | Oil & Gas | BSE: 500325 | NSE: RELIANCE

04 Feb 2009 Evaluate

Delay in transfer of land by the state government, coupled with the global economic slowdown, has taken its toll on the Reliance group’s plans to set up India’s biggest port at Rewas. The company setting up the port is controlled by a Mukesh Ambani group company, Reliance Logistics Investment, and Jai Corp, a company belonging to Anand Jain. These companies hold a combined 65% stake in the project, the Maharashtra Maritime Board owns 11% and the initial promoter, Amma Lines, holds the remaining 24%.

The company cannot go ahead with the project unless the Maharashtra government gives the land. For the time being, it has de-mobilised most of the consultants and advisors who were working for the project. Maharashtra government is likely to discuss the issue of transfer of land required for the project, which includes a SEZ, today. However, a government functionary said the cabinet meeting is unlikely to arrive at a conclusion. The government has been sitting on the issue for over two years.

Rewas Port is learnt to have asked almost 200 employees to go on leave as the future of the project is uncertain. Some people have left the company and joined other organisations. So far, the company has failed to float tenders for the massive dredging works. Also, it could not initiate talks with financial institutions for fund mobilisation. The first phase of the Rewas port was estimated to cost over Rs 5,000 crore and involved the building of 10 berths with a capacity to handle 55 million tonne of cargo a year. The project includes a container terminal with capacity to handle 2.6 million twenty-foot equivalent units (TEUs) per annum.

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