After scrapping the consortium agreement it signed with SEW Infrastructure and its Malaysian partner PRSB for failure to complete construction of coal and steam coal berth, Visakhapatnam port has decided to spend ₹100 crore to complete the remaining work to commission it.
The consortium stopped construction due to financial problems after completing 60% work by spending around ₹210 crore. The consortium had signed 30-year concession agreement in February to complete it by October, 2014.
“As the consortium has failed to complete it, we have to obtain clearance from Union Shipping Minister Nitin Gadkari to go ahead with completing the remaining work and give it on operation and maintenance contract to interested parties,” VPT Chairman M.T. Krishna Babu has informed.
VPT has already scrapped the agreement with SEW Vizag Coal Terminal Private Ltd, the special purpose vehicle which was supposed to achieve an annual capacity of 7.36 million tonne after commissioning the East Quay 1A berth.
Adani berth As Adani Vizag Coal Terminal Pvt. Ltd has stopped cargo operations after completing EQ-1 A berth with a steam coal handling capacity five million tonne by investing around ₹400 crore for more than a year, VPT being the landlord port has decided to take it over.
As there is no demand for steam coal, VPT might convert it into multi-commodity terminal and explore managing it on its own or appointing an O&M contractor. Legal procedures in both the cases viz. SEW and Adani are being consulted to avoid trouble in future. Both SEW and Adani berths are located in the Inner Harbour of Visakhapatnam port.
As part of efforts to become a world-class port, VPT authorities have achieved a capacity of 98 million tonne with an investment of ₹2,500 crore. Another ₹2,500 crore is being invested to raise the capacity to 135 million tonne by 2019.
