L&T plans two mega ports for Rs 3,500 cr

News was prepared under the information support of Online Daily Newspaper on Hellenic and international Shipping "Hellenic Shipping News".

29 Oct 2007

The engineering and manufacturing giant Larsen and Toubro (L&T) will build two mega integrated and commercial ports in the country with an investment of almost Rs 3,500 crore. ''The first port is likely to come up on the West cost and the second on the East cost,'' sources said. Chief financial officer YM Deosthalee told analysts that the company is planning to build two new ports and the investment would be made through the subsidiary company L&T Infrastructure Development Projects (IDPL). ''The company will firm up the decision in two weeks,'' said Mr Deosthalee. ''The funds for the port projects will be raised from domestic and international markets,'' said a company insider. There is also a $1-billion infrastructure fund being set up by the company to beef up its operations in India. And part of the money may find its way to the proposed projects. ''The discussions regarding the infrastructure funds are at the final stage,'' said Mr Deosthalee, adding that its first tranche of $300 million was likely to be invested by March 2008. The company, which has a market cap of Rs 1.11 lakh crore as per the share price of Rs 3,877 on Friday, has already started investing big time in ports and shipyard businesses. L&T is jointly developing a port with Tata Steel at Dhamra in Orissa. Both the companies have 50% stake each in the company floated for constructing the all-weather deep port at a cost of Rs 2,500 crore. Developer of Kakinada port, L&T has already developed a berth at Haldia. Its subsidiary company - L&T Ports and Shipyards - is devising plan to set up a mega shipyard with an investment of Rs 2,000 crore. The location of the shipyard would be finalised soon, said JP Nayak, whole-time director and president of machinery and industrial projects division. L&T is also exploring possibilities of developing a shipbuilding facility at Kachhigarh, a coastal site located near Okha Port in Gujarat. Kakinada is the second location which the company has shortlisted for the said project. ''The Indian port sector is growing 25% a year. Over 600 MT cargo were handled by all ports in 2006-07 alone. To meet the demand by 2012, the capacity of major ports should double to 800 MT and the capacity of non-major ports should increase by 80% to 400 MT,'' said an industry analyst.