The move follows the decision by the state government to float a global tender recently inviting private sector participation in the development of the port.

Earlier, Tacid, appointed the nodal agency for the development of minor ports like Cuddalore and Colachel, had envisaged floating bonds worth Rs 100 crore but after a review of the scope of the project it was decided to limit borrowings to Rs 50 to 70 crore, according to highly placed sources in the government.

The TN government is unlikely to take any equity stake in the project. But it will spend the amount raised for development of land and related infrastructure in the port area.

Tacid has also asked Tamil Nadu Industrial Development Corporation (Tidco) to act as a consultant for the Cuddalore port since it hasthe technical expertise. A detailed project report is expect to be ready by end of this month. Tacid has also roped in a leading credit rating agency to act as financial consultants for the project and to help structure the bonds.

According to the sources, Tacid has written to all Indian embassies in the world to pass on the global tender details to all interested parties and persuade them to participate. Request for qualification (RFQ) documents to those shortlisted as having the financial capability as well as the technical expertise to develop the port as planned are to be issued soon.

Apparently Tacid was at one stage thinking of approaching nine or ten leading port developers around the world to ask them to send their proposals. It was felt that the build, own, operate and transfer (BOOT) concept would not be suitable as no developer had shown interest for developing the 35 minor ports of the country on this basis. So it was felt the government should invest in basic infrastructure to develop theport.

However, the government opted for global bidding. Within the next three months the process of RFQ and request for proposals (RFP) is expected to be completed.

Tacid has suggested to government that because Chennai port is heavily congested, Cuddalore port could be developed as an all weather port having tremendous potential for handling petroleum products, coal, and general cargo.

The sources said Pennar Industries of the Nagarjuna group of Hyderabad was putting up a refinery at Cuddalore. Also Cuddalore would be the base for Cuddalore Power Corporation's coal-based project of 1320 mw and another show-case project of 1500 mw. Besides, once the rail link between Cuddalore and Salem was made into a broad gauge link, the coal for Mettur thermal power station could be brought into Cuddalore port and taken to Mettur.

A sub-committee of Tamil Nadu Maritime Board under the chairmanship of Tacid chairman and managing director Om Kumar has evaluated the project and suggested to the TN government ways offinancing the project estimated to cost around Rs 1450 crore.

As of now, the thinking is that Cuddalore port development can be taken up in a phased manner with the initial phase estimated to cost Rs 850-900 crore. But it is reckoned that first phase development costs can be limited to about Rs 500 crore.

On the railway link, Tacid has written to the Tamil Nadu chief secretary that a meeting be convened of all parties concerned, viz, TN Maritime Board, Tacid, Tamil Nadu Electricity Board and the Railways to discuss cost of broadening the railway line and how it could be shared by the principal parties involved in the project. The energy department of TN government could act as the nodal agency to coordinate all activities in this connection, it was suggested.

The new Cuddalore port project involves capital dredging and development of breakwaters as per the feasibility report done by Consulting Engineers of Delhi. The location of the new port is some eight kilometers from the existing minor port atCuddalore, it is said.