Bhubaneswar, April 18: Paradip port's mechanised coal-handling project, funded by the Asian Development Bank (ADB), has suffered an approximate 50 per cent cost overrun owing to a time overrun. The project, originally scheduled to be completed by April 1998, is now expected to be commissioned in April 2000. The project's revised cost estimate is expected to be around Rs 790 crore, against the original Rs 587 crore.Paradip port chairman SK Mohapatra said, "Everything is under control and the project would be completed by April 2000." The earlier time schedule was too optimistic, he added.
The time overrun was owing to a delay in getting railway approvals and in rebidding of some packages.
Of the project's 12 packages, seven have been launched and the the remaining five are well within the slack time available, he said.
Dredging of the berth area has been completed and the construction of two berths is in the halfway stage. Land-filling work has been completed, too. Construction jobs are in variousstages of progress and some are likely to be awarded by June, he said.
The ADB-aided project envisages movement of 20 million tonnes of coal by 2000, from Talcher to the port of Ennore on the Tamil Nadu coast by rail and sea routes passing through Paradip port. A feasibility study has found it most economical to transport coal by rail from Talcher to Paradip and then by ship from Paradip to Ennore. The ADB is providing $150.15 million for the Ennore port.
Demand for thermal-grade coal from the south is expected to touch the 35-million tonne mark by the turn of the century as a number of thermal power plants are coming up in Tamil Nadu and Karnataka.
Earlier, the project was embroiled in a controversy over the appointment of BHPE-Kinhill as consultant to the project. Mohapatra, refusing to comment on the selection of the consultancy, said he was not there when the contract was awarded. He also denied any knowledge of any investigation ordered by the ministry of surface transport on this issue.
Thechairman said that despite the cost overrun the project will be viable since the internal rate of return will be around 15 per cent when completed as against the borrowing rate of 14 per cent. The ADB funds of Rs 400 crore is available at 14 per cent and the remaining Rs 390 crore will be funded from the port's internal resources.
Mohapatra said the project's commissioning largely depends on the doubling of the railway track between Cuttack and Paradip, which is yet to take off. The railway authorities have promised that if the track cannot be doubled its capacity will be increased enabling it can handle the 20 million tonnes of coal traffic by 2000.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
