After a longdrawn battle to take control over debt-ridden Essar Steel, the Ruias of Essar Group and L N Mittal of ArcelorMittal have locked horns for wresting control of the captive port at the steel plant facility at Hazira.
Sources said Essar wants to handle third-party cargo — commercial cargo from other industries — according to the state’s new port policy for the two captive jetties in Hazira that are owned by Essar Bulk Terminal (EBTL). But ArcelorMittal has opposed the move, the sources added. ArcelorMittal, which acquired the steel facility in November after the Supreme Court approved its resolution plan, has renamed Essar Steel to AM/NS India, now a joint venture of ArcelorMittal with Nippon Steel group.
The Gujarat Maritime Board (GMB), the state’s maritime regulator, signed a supplementary agreement on December 13, 2019 with the promoters of Essar Group, who own 74% in EBTL, allowing them to handle third-party cargo without any quantitative restriction. The GMB decision, however, has been put in abeyance by the state government after ArcelorMittal protested the decision on December 17 — the same day when Mittal called on chief minister Vijay Rupani.
The agreement was not approved by the state government, hence it was put on hold, said sources. “The representations from affected parties are under examination by the government. The government is reviewing the development,” said GMB vice-chairman and CEO Mukesh Kumar.
Mittal raised concerns about the issue when he met senior government officials in December after the takeover. Essar Group promoter Prashant Ruia too met senior government officials on January 9 to discuss the matter, said sources.
In October 2019, the GMB introduced the new port policy with to “unlock value in existing port infrastructure by allowing existing captive jetty holders to handle thirdparty cargo and opportunity for new players”. The new policy grants exiting captive jetty holders the option to either opt-in or opt-out of the said policy framework. If an existing captive jetty holder opts in, then they are required to enter supplementary agreement with GMB.
AM/NS India made several representations to the state government in December that allowing the terminal to opt-in to the new policy would give backdoor entry to a third party for converting a captive jetty into a commercial jetty.
An email sent to an ArcelorMittal representative remained unanswered.
Essar group promoters have in their representation to the state stated that EBTL has invested more than Rs 3,000 crore in the two jetties and the port is largely unutilised as only 22 million tonnes of captive cargo is being handled currently.
“EBTL’s agreement with GMB is in lines of the new port policy, which is aimed at increasing cargo of Gujarat ports. How can AM/NS India, which is a minority stakeholder in EBTL, decide whether the company should opt in or opt out of a policy?” said a company official.