The Machilipatnam Port project in Andhra Pradesh is finally moving forward. The foundation stone of the Rs 1,600-crore project was laid on April 23 at the hands of Chief Minister Y.S. Rajashekhar Reddy, more than a year after the concession agreement was signed with the private developer consortium in February 2007. What is encouraging, however, is that the cost escalation issue that had dogged the project for months is headed for an early resolution.
Speaking to Projectmonitor, Saksham Garu, Assistant Secretary, Ports Department, Andhra Pradesh, said the state government would decide on the cost escalation issue over the next 15 days. Public sector Water & Power Consultancy (India) Ltd is expected to certify the cost escalation of around Rs 330 crore that is the result of relocating the project from its old site Gogileru to Gilakadinne. The state government is committed to meet the cost escalation, once certified, Garu said. The project is expected to reach financial closure over the next 30-40 days, he observed.
Machilipatnam Port has been awarded to a consortium of SREI Infrastructure Ltd (37 per cent), Maytas Infra (26 per cent), Nagarjuna Constructions Ltd (25 per cent) and Sarat Chatterjee & Company (VSP) Pvt. Ltd (10 per cent). In phase-I, the port with three berths will handle 15 million tonnes of cargo annually, mainly coal imports for APGenco's Vijayawada thermal power station, and cement plants in the Krishna belt. "It is a fully private port with no share of the government in the port's revenue," Garu explained, adding that the state government will earn part of the profits generated by the port company. Phase-I will have a gestation period of three years. The port in its full scale is envisaged to handle 35 million tonnes of cargo annually, through 12 berths.
"Maytas Infra is proud to be associated with Machilipatnam deepwater port that will provide a strong impetus to the development activity in this region. The project would be developed in three years, and we look forward to contributing to the progress of Andhra Pradesh," Teja Raju, Vice Chairman, Maytas Infra Ltd, said in a company statement. The project, located in Krishna district, will be developed on BOOT basis under a 30-year concession period.
Relocation: Soon after Machilipatnam Port was awarded in February last year, Andhra Pradesh government decided to relocate the project from Gogileru to Gilakadinne. The new site is in the vicinity (4 km north) of the old Machilipatnam Port that is lying unused since 1990s. The change in location was inspired by demands of the local population that sought the transformation of the traditional Machilipatnam Port, believed to be the oldest port in the state, into a modern port city.
Machilipatnam Port progress augurs well for maritime development in Andhra Pradesh. Two more private ports - Gangavaram and Krishnapatnam - are expected to start operations later this year (see related story on section Transport).