According to a report prepared by Crisil Advisory Services (CAS) on infrastructure in Gujarat, if the Dahej facility does come up, Hazira may need to be deferred to fiscal 2005. Among the shortlisted developers for the project are the Reliance-Elf-Tractebel consortium and the Shell-Essar combine.

The CAS report, which was released in Ahmedabad on Sunday, indicates that Dahej may have a first mover advantage. Due to the commonality of hinterland between Dahej and Hazira, if the former comes up first, it may pre-empt Hazira's cargo. CAS has, however given a positive outlook on Hazira, if Dahej does not handle general cargo. Petronet LNG is constructing a 5 million tonne per annum integrated port and LNG facility at a cost of $700 million. However, the Gujarat Maritime Board has also stipulated that a 14 milliontonnes per annum general cargo facility also be constructed.

Although both ports would cater to the same hinterland, Hazira has an 8 million tonne local cargo component which is currently catered to by private literage operations. According to the report, if Hazira could attract this cargo, there would be very positive commercial implications. According to the Reliance-Elf-Tractebel's proposal, the CAS has pegged the Hazira port's potential cargo at 18 million tonnes per annum by 2001. Of this, the LNG traffic is expected to be 3.5 million tonnes (the proposal however has a 2.5 million tonnes LNG capacity in phase-1.)

If Petronet decides not go for phase II, Hazira could become one of the busiest ports in the country with a potential of handling 97 million tonnes by 2010. The finding of the CAS report, which attempts to find the demand supply gap in all infrastructure sectors, is that Gujarat has tendered out adequate capacity until 2005. The ports, all at various stages of development, include thePSA-promoted Gujarat Pipavav Port Ltd (GPPL), the Adani- promoted Mundra Port, Petronet LNG's Dahej and Natelco-Unocal's Maroli port. In fact, in 2004, the state's ports will have a combined overcapacity of 10 million tonnes per annum.

However, unless additional capacity is generated post 2005, the state will have a shortfall of 75 million tonnes in 2010. Gujarat already has something like Rs 11,435 crore under investment in the port sector. CAS has pegged the additional requirement needs at Rs 12,288 crore.

In its report, CAS has advised that for the purposes of marketing, Gujarat take up Hazira (essential for creating post 2005 capacity) and Positra on an immediate priority. A Netherlands-based study team has reported that Positra has an excellent potential as a regional container feeder port, servicing the larger ports in the region. There is also the possibility that Positra, located on the mouth of the Gulf of Kutch, could emerge as a hub for coal handling. CAS has given a positive investment outlookfor both Hazira and Positra.

Among the other port sites that could be marketed but have a contingent investor outlook are Simar and Mithivirdi. The ports that have a negative investment outlook, according to CAS are Vansi Borsi and Bedi (currently the hub of soyabean cake exports from Madhya Pradesh).

Although Gujarat has had a first mover advantage in creating a good port policy and therefore attractive larger investment than any other maritime state, CAS has made recommendations that could make the policy more successful.