Denmark based AP Moller Maersk Group, one of the largest port operators in the world, has emerged as the frontrunner to acquire a significant stake to be offloaded by Infrastructure major, Larsen and Toubro at Dhamra Port located in Orissa.
Dhamra Port, jointly promoted by infrastructure conglomerate Larsen and Toubro and TATA group has been holding talks with several port operators including Adani Group and various sovereign and private equity funds in the past.
While uncertainties loom large over the necessary infrastructure at the port involving the road and rail network, APM Terminals' negotiations has progressed further than others with L&T and Dhamra Port. A stake acquisition in Dhamra would enable APM Terminals to improve its presence on the country's east coast.
A person close to the development said that "APM has now emerged as the frontrunner to acquire the stake to be offloaded by Larsen & Toubro. APM is also looking at developing the container facility at the port and if they clinch the deal, they will now own one port on the west and east coast of the country."
Dhamra Port was built at an estimated cost of USD 588 million with a capacity to load 27 metric tonnes of cargo. The port, which is outside the purview of union government control, is free to set its own rates unlike at major ports where rates are fixed by the union government.
In India, APM currently operates various container terminals across major and minor ports and also owns one of the largest ports on the west coast, the Gujarat Pipavav Port.
According to sources, TATA Group, the other JV partner is also likely to sell its 26% in the port, paving way for APM to acquire more than 75% stake in the company.
Officials at APM Terminals who did not wish to be named said that the company had earlier approached Dhamra Port to set up container terminals at the port, but the project could not materialize since the port did not have necessary rail and road infrastructure.
An official from Maersk Line, world's largest shipping company and a subsidiary of AP Moller Maersk said that "The port is strategically located as many of the large scale industries have their operations in the area. Vedanta Group and JSW currently use the port facility at Vishakhapatnam instead of Dhamra Port and we see huge potential at Dhamra Port to emerge as one of the largest in the east coast."
Mr Manish Saigal head of transportation at advisory firm KPMG said that "Within India, the ports on the east coast have been growing at a much faster pace than the ports on the west coast. The intra-Asia trade has been witnessing better growth and that makes the ports on the east coast a lucrative option for various terminal operators."