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Kamarajar Port Ennore raises 100 million dollar loan to part fund expansion projects

The Kamarajar port Ennore the only Corporate Port among the major ports of the country has raised a One hundred million US dollar loan (Rs 1,220 Crores) from Axis Bank to fund the expansion projects including deepening of the port to 18 meters draft.

The Port Chairman M A Bhaskaracharya has announced the decision of the port to go in for the dollar loan at an interest rate of around three per cent. The interest rate for the dollar loans is competitive compared to domestic lending rates by commercial banks which vary from eight to ten per cent for Corporate loans.

Following the directive of Shipping Minister Nitin Gadkari that the government owned ports should go in low cost foreign currency borrowing by leveraging the port's foreign exchange earnings which provided a natural advantage to the port sector. This would help cut finance cost and make the ports more competitive.

The Port floated a tender recently for the loan and the participants include Kotak Mahindra Bank and HDFC bank. The State Bank of India had also evinced interest in the project. Axis Bank was chosen by the Port in the tender since it quoted the lowest interest rate of 3.15 per cent. The loan has since been approved by the Port's Board.

The Kamarajar port has become the second port in the country after JNPT in Navi Mumbai to secure dollar loan. The loan has a tenure of five years including a moratorium period of one year from the date of the first disbursement. JNPT also secured a dollar loan at the same interest rate.

Following the footsteps of Kamarajar and JNPT ports, Kandla Port's board has also cleared a proposal to raise dollar loans to fund the port's expansion projects.

Mr Bhaskaracharya who will be relinquishing office after a five year stint as Chairman of Kamarajar Port by the end of this month said the loan will be used to deepen the port to eighteen meters draft from the present sixteen feet so that capex vessels could dock at the port. Handling such huge vessels will help to reduce the cargo handling costs he said

Other expansion projects to be funded from this loan include a new coal berth for the Tamil Nadu government run power utility, a new general cargo berth, the second automobile export terminal with a capacity to handle three lakh cars.

Jawaharlal Nehru port was the first port in the country to go in for dollar loans. The largest cargo handling port in the country raised a loan of four hundred million dollars from a consortium comprising State bank of India and Development bank of Singapore. The project funded includes construction of road for faster evacuation of cargo from the Port.


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