The Indian Union ministry of shipping has approved the tender submitted by the Gujarat-headquartered business conglomerate Adani group for the Cochin Port Trust's (CPT) proposal to set up a coal terminal.

The new terminal will be developed on a Build-Operate-Transfer basis. The successful bidder will run the terminal for a period of 30 years. Only Adani group had responded to the tender notice issued by the CPT even after extending the deadline twice.

The project cost is estimated at INR1,980 million (US$32.3 million).

Cochin Port Trust official stated:

Once the minutes of the standing finance committee reaches us, we will start the next phase of tender process which will be inviting request for proposal (RFP) from Adani group.

He said the question of awarding the terminal contract to Adani group would largely depend on the terms of the revenue sharing model that the company would be proposing.

Currently, the port handles only about 1,000 tonnes of coal on an average per year, but, the new coal terminal, which would combine the port's existing north coal berth and south coal berth on the Mattancherry Wharf side will have the capacity to handle 4.23 metric tonnes per annum. The CPT would be offering 14 acres of land for the project and a 300-meter long berth.

The terminal will be located at the port's existing north coal berth and south coal berth on the Mattanchery Wharf side. Once the modern terminal starts functioning, coal will be handled in a covered facility. The terminal will be fully automated and will have nine metre-high vegetation.

The terminal is being developed with a view to cater to steel and cement industries located in the state and the neighbouring states like Tamil Nadu.