Bhubaneswar, Aug. 7: In times of confrontation over sharing of Mahanadi waters between Chhattisgarh and Odisha, here is good news. The state government is set to construct a riverine port on the mouth of the Mahanadi.

The proposed port (see map) will be built on the river mouth in the Mahakalpada block of Kendrapara district, opposite the Indian Farmers Fertiliser Cooperative Ltd's fertiliser plant and the upcoming site of Essar Steel Odisha Limited facility near Paradip, official sources said.

The port project would cater to the needs of mineral-rich Odisha, as well as Jharkhand and Chhattisgarh. It will be a common user port for various industries and mines in these states. While iron ore and pellets, raw fertiliser, alumina and raw crude oil will be imported through this port, finished crude oil, steel and steel products, chromite, mineral sand and bauxite would be shipped out, says the detailed project report.

The estimated cost for the proposed port, which will be developed in public-private partnership mode, has been pegged at Rs 2,562 crore. Calcutta-based Water and Power Consultancy Services has conducted the techno-feasibility study of the port, which will be the state's first such riverine facility.

The proposed project has been found to be technically feasible and financially viable with an expected return of 14.36 per cent, said a senior official of the state's commerce and transport department.

Ernst & Young, which has been appointed as the financial consultant for the project, will prepare the tender document. "The tender process is likely to be over by the year end," said the official.

The comprehensive environment impact assessment study is in progress and the process of land acquisition has been initiated, said sources. While an estimated 175 hectares are required for the first phase of the project, 300 hectares would be needed in the second phase. In the first phase, four berths will be constructed, while two more will come up in the second phase. The cargo handling capacity of the proposed project has been pegged at 55 million tonne per annum.

The proposed port will have rail and road connectivity from Paradip, which is fast emerging as an industrial hub.

Indian Oil Corporation's oil refinery was inaugurated there on February 7 and there is a proposal for establishment of petro-chemical and petroleum investment region in the area.

Earlier, Paradip Port Trust had shown interest to build a satellite port on the Bahuda river mouth at Gopalpur in south Odisha in collaboration with the state government. However, the proposal did not work out.

However, this is not the only port activity in the state.

The Inland Waterways Authority of India signed an MoU with the state government, Paradip Port Trust and Dhamra Port Company Limited on June 30, 2014, to develop the stretch of national waterway No. 5 between Jokadia/Pankapal and Paradip-Dhamra ports. The 201km stretch will connect Paradip and Dhamra ports with industrial facilities at Kalinga Nagar and Vyasa Nagar and with Daitary iron ore mines and others in the hinterland.

In the second phase, the development of 131km stretch of waterway from Pankapal/Jokadia to the coal belts of Talcher will be taken up. The dredging work of the waterway has been carried out in three stretches to achieve a draft of 2 meters. Mathematical studies on the Brahmani river network for the development of the waterway have been submitted by IIT-Guwahati to the state government.

Though at present, there is no plan to link the proposed riverine port and the waterway, the state government is thinking of constructing a terminal near Paradip to access the riverine port in future, a source said.