New Delhi, Oct 7 (IANS): In a move to augment the thermal coal handling capacity of Paradip port on the east coast, the cabinet committee on economic affairs (CCEA) on Wednesday approved mechanisation of three of its east quay berths to increase their capacity to 30 million tonnes.

"Mechanisation of berths at Paradip port will help in reducing power costs by reducing transportation costs," Shipping Minister Nitin Gadkari told reporters here after the cabinet meeting.

The minister said the cabinet panel gave "approval to the project of mechanisation of east quay (EQ) berths-1, 2 and 3 at Paradip Port on build, operate and transfer basis, under the public private partnership mode for handling thermal coal exports."

A cabinet communique said: "The estimated cost of the project is Rs.1,437.76 crore of which Rs.1,412.76 crore will be spent by the concessionaire. The remaining Rs.25 crore will be spent by the Paradip Port Trust on dredging," it said.

"The project envisages mechanization of EQ 1, 2 and 3 berths to increase their capacity from the existing 7.85 million tonnes to 30 million tonnes," it added.

After completion of the project, the total thermal coal export handling capacity at the port in Odisha will reach 50 million tonnes.

"This will help the port to meet the growing demand of thermal coal over the next three to four years," the statement said.

This mechanisation project will improve the operational efficiency and reduce transaction cost for thermal power plants dependent on coal supply through Paradip port, it added.