Plans for new coal port in Gujarat scrapped on environmental grounds

India’s largest engineering and construction company has reportedly ditched its plans to build a new coal port at Kacchigadh, near Dwarka in Gujarat.

Larsen & Tourbo (L&T) has told the Indian government it will not go ahead with the development for “environmental reasons”.

“L&T had appointed the Gujarat Ecology Commission to carry out environmental studies and found that the place was full of corals and mangroves. As a result they want to exit,” an official of the Gujarat Maritime Board (GMB) told press in India.

The firm had planned to use the multi-purpose port for importing coal to fuel a 2,000-mW coal-fired power station it had planned to build.

The GMB has approved L&T’s plans to withdraw the project, and the request is pending final approval from the state government.

Other commentators told press that there were also questions of financial viability hanging over the Kacchigadh port development.

It looks as though the withdrawal is part of L&T’s wider strategy to exit port operation and focus more on development and engineering.

L&T is reportedly in talks with the Adani Group to sell its stake in the Kattupalli International Container Terminal near Chennai.

In May 2014, subsidiary company L&T Infrastructure Development Projects and Tata Steel sold their joint stake in Dhamra port in Odisha to Adani Ports and Special Economic Zone.

“Running and operating a port is not the core competency of L&T. Since it has expertise in construction, design and engineering, it can make more profit by building a port and then selling it off at some point. It did so in the case of Dhamra,” Anand Sharma, director of consultancy firm Mantrana Maritime Advisory, told Indian press.