INDIA BUSINESS WORLD - AUGUST 2006
THE MONTH THAT WAS...

RELIANCE SAILS INTO PORT SECTOR WITH 40% BUYOUT OF REWAS

MUKESH Ambani's Reliance Industries (RIL) is foraying into the port sector in a big way. The group, which is setting up a mega special economic zone (SEZ) in Navi Mumbai, will pay around Rs 200 crore to pick up close to 40% stake in Rewas Port Ltd (RPL). The Rs 5,000-crore greenfield port, around 10-nautical miles off the Mumbai harbour, will be developed by Reliance and initial promoters Amma Lines. The deal is likely to be signed early next week, said sources close to the development.

As part of the deal with the Maharashtra government, Amma Lines is expected to hold a majority stake in RPL. Sources said Reliance will, however, increase its RPL stake later. RPL may also rope in international port/terminal operators with an operational contract.

The acquisition will help Reliance secure a key supply and export route for the proposed mega SEZs in Navi Mumbai and nearby Raigad districts. The two SEZs would, when completed, cover a total area of about 35,000 acres. A nearby all-weather port, with deep draft of 20 metres compared to Jawaharlal Nehru Port Trust's 12.5 metres, will help exporters and importers, as even the biggest container ships would be able to call on the port. Reliance also plans to construct a 40-metre single buoymooring facility that would help large crude carriers offload their cargo. The port, the proposed airstrip and road facilities such as the Sewri-Nhava Sheva trans-harbour link would help Reliance attract more clients to its SEZs.

Amma Lines has already bought out a 50% stake held by IL&FS in Rewas Port Development Company for Rs 50 crore, to make it a wholly-owned company. RPL chairman and managing director Vijay Papa Rao will remain chairman, as part of the agreement.