ASSIGNMENT SUBMITTED FOR FIFTH SEMESTER SUBJECT: LOGISTICS AND SUPPLY CHAIN MANAGEMENT TOPIC: UPCOMING PORT BACHELOR

OF BUSINESS MANAGEMENT IN SHIPPING & LOGISTICS

NAME: R.RAJESH KUMAR ROLL NO: 074

 Mumbai, Sept. 7 A dispute is brewing in between the Mumbai Port and Reliance Industries Ltd (RIL) on payment of royalty for the right of seaway for the latters proposed Rewas Port.

 Reliance is setting up a port at Rewas, nearly 10 nautical miles away from the Mumbai harbor, to provide a sea-link to its proposed Special Economic Zone, at a cost of about Rs 5,000 crore.  Part of the approach channel to the Reliance port, said to be about 17 km, passes through the Mumbai port territorial water. For the right of use of this harbor water, the Mumbai Port wants certain compensation from the proposed port.  Reliance is understood to be taking up the matter through the Maharashtra Maritime Board, which also holds minority stake in the port.  According to Mumbai Port officials, payment for the right of use of waterways is not something new. The Jawaharlal Nehru Port has been paying a percentage of its revenue to the Mumbai port for using its channel. ONGC also pays a charge to Mumbai port for its pipeline passing though its water.  Reliances view, according to sources, is that when a port is allotted to a private party by the government for development, it should have the right of (sea) way to the port. When the Mumbai port started years ago it was the only port and its water limit was decided then.

A source, however, said Reliances strategy would be to negotiate with the Mumbai port and bring down the payment. Reliance has recently acquired the controlling state in the Rewas port from its original promoters Amma Lines. It is now re-doing the entire plan and the port is scheduled to be operational in two years. The company said it would be floating tenders shortly for dredging (This article was published in the Business Line print edition dated September 8, 2007)

Source: - Business lender -12, July 2011 edition  The Mukesh Ambani-controlled Reliance Group is set to build Indias largest port Rewas, as part of its Navi Mumbai Special Economic Zone (SEZ).

 The Port whose draft is believed to be virtually double than that of the countrys deepest Jawaharlal Nehru Port (JNPT) will also be the cheapest in India as port costs will be reduced by one fifth of the other Indian ports.  Ambani's group company, Reliance Logistics Investment along with Jai Corp a company belonging to his close aide, Anand Jain, inked a deal to buy a majority stake in Rewas Port.  Confirming the deal, a Reliance official said that Reliance Logistics and Jai Corp have bought a 51% stake in Rewas Ports belonging to first generation entrepreneur Meka Vijay Papa Rao. The official added that there will be fresh equity at par to new partners. However, future investment in the project whose first phase itself will cost Rs 2,500 crore will be tied-up by the new partners.  Rewas Port has also included six new board members from Reliance group and Jai Corp including Anand Jain. Of the remaining board members of Rewas Port, three will be from Amma Lines belonging to Papa Roa and two from the Maharashtra Maritime Board which will take 11% in Rewas Port.  In 2002, Amma Lines was awarded the license by the state government to develop Rewas Port. Now, the license is transferred to Rewas Port. Papa Rao, however, will continue be the chairman.  The Group plans to invest more than Rs 3,000 crore in developing the port, which is located 10 nautical miles or 16 km south east of Mumbai harbor, and awaits environmental clearances to launch construction.  With a draft (depth of the sea) of 20 meters, the Rewas port has proved to be a clincher for Reliance Group, which is developing two mega SEZs across 35,000 acres in Navi Mumbai and expects a steady flow of cargo.  The draft, which can be increased to 22-23 meters, will ensure that large ships, even supertankers, can berth here.  The Rewas port, a nodal point for exports from the SEZs, will be connected with both rail and corridors including a separate rail freight line between the SEZ and its Haryana counterpart. The ports will have18 berths at the end of phase II.  Such connectivity will provide easier evacuation of cargo from the port which is set to have 18 berths at the end of phase II and total investment scaling up to nearly Rs 5,000 crore.