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State going ahead with Bhavanapadu port plan

Monday, 20 July 2015 | 00:00
Developments with regard to Bhavanapadu Port in Srikakulam and talks for diluting shares in Gangavaram Port in Visakhapatnam have become topics of heated discussion in various circles.

The outright rejection of the Ministry of Shipping’s proposal to develop Bhavanapadu as a joint venture with the Visakhapatnam Port Trust has baffled many. Bhavanapadu is the first port proposed to be built under PPP mode by the State government post-bifurcation.

Infrastructure Corporation of AP is now in the process of calling for Request for Qualification after short-listing 12 firms who responded to Expression of Interest notification. Highly placed sources told The Hindu that the Ministry of Shipping wrote a letter to the State to explore a joint venture between the AP government and the VPT going by the rich experience of 80-year-old Visakhapatnam Port.

However, the State due to reasons best known to it ignored the recommendation and called for EoI in March. The short-listed firms include Vedanta, Adani, Krishnapatnam and Gangavaram Ports. A consortium comprising Sravan Group, Vizag Profiles and RKEC Project Private Ltd are also in the race.

It is estimated that the Greenfield port has potential to handle 10 million tonne coal in two to three years of operation by building four berths. However, acquisition of land has emerged as a thorny issue.

Gangavaram Port

Even as the Gangavaram Port Limited, the special purpose vehicle which developed Gangavaram Port on the city outskirts after the State government put pressure on Rashtriya Ispat Nigam Limited to surrender part of its surplus lands denied any bid to offload its shares, there is a strong buzz that Gautam Adani-led Adani Group is holding talks with Warburg Pincus to buy its equity.

Warburg Pincus, an American equity firm, which has 31.50 per cent equity in the port, has not responded yet to media reports. However, GPL, in which D.V.S. Raju-led consortium has 58.11 per cent equity, stoutly denied the reports.

The State government has 10.39 per cent equity in the port which has come up on the backyard of RINL, the corporate entity of Visakhapatnam Steel Plant.

“As per our information, Adani Group representatives have already visited the port. The concession agreement rules out sale of equity. If the management is keen, let it sell its equity to RINL, VPT and State government,” Gangavaram Port Employees’ Union honorary president B. Ganga Rao said.
Source: The Hindu
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