Andhra Pradesh Sparks Interest with EoI for Port Construction, Operation, and Maintenance.

Months after the Telugu Desam Party (TDP) returned to power under Chief Minister N. Chandrababu Naidu, the Andhra Pradesh government has issued an Expression of Interest (EoI) inviting potential investors for the construction, development, operation, and maintenance of ports in the state. Andhra Pradesh, the second-largest coastal state in India by cargo handled, has stirred excitement and speculation in the port industry with this move.

Experts are unclear if the EoI pertains to the three greenfield ports under development—Ramayapatnam in Nellore district, Machilipatnam in Krishna district, and Mulapeta in Srikakulam district—with an investment of ₹17,067 crore, or if it signals plans for new ports. The inclusion of the term "construction" in the EoI has led to speculation that Naidu may be considering halting the current state-funded construction of these ports, initiated by the previous Y.S. Jagan Mohan Reddy government, and transitioning to a public-private partnership (PPP) model, a strategy he employed during his earlier tenure.

A senior government official criticized the EoI, describing it as "meaningless" and raising concerns about the lack of clarity on its purpose. Industry insiders believe the EoI might be laying the groundwork for privatizing the three ports, currently being developed under the engineering, procurement, and construction (EPC) mode.

The port industry anticipates that the Andhra Pradesh Maritime Board (APMB) may privatize the new ports on an operation and maintenance (O&M) basis for 30-40 years post-construction, rather than the government running them directly. There are also concerns about the possible concentration of port ownership, with industry figures cautioning against handing over multiple ports to a single private entity, as it could disrupt the state's maritime sector.

The construction of these new ports, along with the Kakinada Gateway Port, is expected to boost the state's cargo handling capacity by 110 million tonnes by 2027. Andhra Pradesh, home to one major port in Visakhapatnam and five non-major ports, handled 198.71 million tonnes of cargo in FY23. With a robust growth rate of 13.5% in cargo handled at non-major ports, the state continues to rank second in India for port operations, trailing only Gujarat.

The EoI outlines a comprehensive scope, covering areas like port modernization, greenfield port development, cargo handling, environmental impact assessments, and more, signaling the state's commitment to building a world-class maritime sector.

ET