Adani Group targets up to Rs 20,000 crore investment in ports by 2030
The Adani group is planning to invest up to Rs 20,000 crore in expanding its ports cargo volume capacity by four times to 1 billion TUs by 2030 to emerge as the world’s largest port company. The group may also look at acquisition opportunities in the port sector across the world — provided the group gets a good local partner and there is economic and political stability in that country, Karan Adani, scion of the Adani group and chief executive officer of Adani Ports & SEZ said here today in an interaction.
The group, which acquired Haifa Port in Israel early this year for $1.2 billion, is looking for acquisitions of ports in East Africa (Kenya and Tanzania), Vietnam and ports in the Mediterranean Sea. “The port overseas must have good trade ties with India and a strong domestic economy for us to invest,” Adani said. “Many ports across the world are run by the governments and they are looking to privatise them. We are looking at a few of them,” Adani said.
On Haifa Port in Israel, where a war has broken out between Hamas and Israel, Adani said the fight has no impact on its operations so far. “We are very confident of our investment in Haifa. When we had done our due diligence for Haifa Port, we had expected some disruptions. The port operations are currently ongoing and we do not expect any problem going forward for port operations,” Adani said. Only 3 per cent of the AP&SEZ total volume currently comes from Haifa Port.
“We do a lot of due diligence and we take a lot of calculations when we are entering a country, but obviously, political stability is the most important factor,” Adani said.
Adani said the company (AP&SEZ) will be investing Rs 5,000 crore to Rs 6,000 crore each year in expanding its capacity. “The company is earning Rs 7,000 crore to Rs 8,000 crore of free cash flow each year which will be used to fund the expansion,” Adani said as the group inaugurated its Vizhinjam transhipment terminal here. The company will buy back its entire foreign exchange bonds of $650 million by January next year, Adani said.
The estimated project cost for Vizhinjam project’s phase one is Rs 7,700 crore, comprising a private-public partnership (PPP) component, funded work, external support infrastructure, cost of land, rehabilitation etc. “We are very confident actually of the business case in this site because we are seeing a lot of interest from shipping lines from customers to use this port and because of that encouragement we will be expanding as soon as this phase is over,” Adani said.
“Because with Vizhinjam port and also our position in Colombo, we will be able to give a solution to the shipping lines connecting to all our ports in India,” Adani said.
The Vizhinjam port will play a very critical role from the supply chain surety to shipping lines in terms of not just container but also from bulk, from bunkering and other commodities point of view, Adani said.
The PPP component costing Rs 4,089 crore of the Vizhinjam port consists of the berth, dredging and reclamation, project equipment, container yard, and allied facilities. The construction of a breakwater and a fishing harbour (funded work) will be constructed by the private partner, for which the Kerala government would pay an amount of Rs 1,463 crore.