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Government of India

Ministry of Shipping, Road Transport & Highway

Department of Shipping

Transport Bhavan, 1, Parliament Street

  New Delhi – 110 001

 

No. PD- 26014 / 3 / 2004 – Sethu                                        Dated the 1st  June  2005.

 

To       

           The Chairman- Cum Managing Director,

           Sethusamudram Corporation Limited,

           Tuticorin Port  Trust,

           Tuticorin – 4.

 

Subject :  Implementation of Sethusamudram Ship Channel Project  (SSCP).

 

Sir,

 

            I am  directed to convey the sanction of the competent authority for implementation of Sethusamudram Ship Channel Project at a cost of Rs. 2427.40 Crores consisting of capital cost of Rs. 2233 Crores and financing cost of Rs. 194.40 Crores including Interest During Construction (IDC) component of Rs. 126.80 Crores, subject to the following conditions :

 

(i)                 M/s Sethusamudram Corporation Limited (SCL)  will be the nodal agency for raising resources and implementing the project through Tuticorin Port Trust.

 

(ii)                The financial structure of the M/s SCL will be as under, keeping the debt equity ratio as 1.5 : 1 :-

 

Total Project cost                                 : Rs. 2427.40 Crores

Equity                                                 : Rs.   971.00 Crores

Debt (About 50% in domestic currency

And the balance in foreign exchange)     : Rs. 1456.40 Crores

 

(iii)              The equity contribution of Rs. 971 crores in M/s SCL by different agencies shall be as under :

 

Sl No. Name of the Organisation

Equity Contribution (Rs. in Crores)

1

       Government of India 495

2

       Tuticorin Port Trust 50
3       Shipping Corporation of India 50
4       Dredging Corporation of India 30
5       Chennai Port Trust 30
6       Ennore Port Limited 30
7       Visakhapatnam Port Trust 30
8       Paradip Port Trust 30
9       IPO/ Private Placement/ Users

226

 

(iv)              Government of India’s guarantee shall be extended for domestic and foreign debt to be raised for this project.

 

2.       The principle approval is also accorded to provide interest free non-plan loan assistance of Rs. 390.05 Crores from the Government of India and Rs. 374.75 Crores from the other Ports and PSUs  that are equity partners in the SPV  in proportion to their equity holding for offsetting the negative cash flow, over a period of first 9 years of  operation starting from the year 2009-2010.

 

3.       Approval is also accorded for awarding dredging work in a stretch of the channel involving 12 to 13 million cubic meters of dredging in Palk Strait area adjoining Bay of Bengal, to the Dredging Corporation of India (DCI) on nomination basis subject to DCI guaranteeing completion of the work as per agreed schedule. The rates payable to DCI for this work will be the prevailing market rates.

 

                                                                         Yours  faithfully,

                                                                        

                                                                                    Sd /-

                                                                             (S.K.Shahi)

                                                               Under Secretary to the Govt. of India

 

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