May 14, 2008 / 12:39 PM / 12 years ago

UPDATE1-Lanco consortium wins $2-bln Kerala port project

(Adds details)

MUMBAI, May 14 (Reuters) - Lanco Infratech Ltd (LAIN.BO) said on Wednesday its consortium with Malaysia’s Pembinan Radzai had won rights to build the Vizhinjam Container Port project in Kerala, estimated to cost 80 billion rupees ($2 billion).

The project, proposed to be developed as a container transhipment hub, will be developed in 4 phases with a total capacity of 6.5 million twenty foot equivalent unit (TEUs), Lanco said in a statement.

The first phase would be completed in 60 months.

“In the first phase, the capacity would be 1.5 mln TEUs at a cost of 24 billion rupees. Once traffic goes up, we will add capacity in the next phase,” Sanjay Joshi, director of infrastructure, told Reuters over the telephone.

Seventy percent of the funding of this project will be through debt and the rest through equity, Joshi said.

The company would form a special-purpose vehicle for the project, in which the Kerala government would hold a 24 percent stake.

“We will have to prepare a detailed project report and get environmental clearances, which will roughly take a year,” he said.

The Malaysian company will act as a port operator and will have a very small equity stake in the project, Joshi said.

Other contenders for the project were Nagarjuna Constructions NGCN.BO, Maytas Infra MAIL.BO, Videocon group, Gammon Infra (GAIN.BO) and SICAL Logistics (SICA.BO), among others.

The project site, close to the capital of the southern state of Kerala, connects to Europe, Persian Gulf, far East and would attract the container transhipment traffic meant for India, the statement said.

The project is expected to benefit Indian companies engaged in export and import as it would save foreign exchange outgo, time, costs and other transhipment risks, the release stated.

Ahead of the announcement, shares in Lanco ended at 513.80 rupees, up 10.88 percent in a firm Mumbai market. (Reporting by Prashant Mehra and Swati Pandey; Editing by Prem Udayabhanu)

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