Why Andhra Pradesh Should Waste No Time In Building A Port In Beach Town Ramayapatnam

Ramayapatnam, a tiny beach resort in Prakasam district of Andhra Pradesh, has been identified as a suitable place for a natural sea port since the days of the British. However, it was not realised due to various political compulsions though later couple of new ports surfaced in the state after Independence.

In 2012, former chief minister N Kiran Kumar Reddy had almost zeroed in on Ramayapatnam as the location for the proposed port when the United Progressive Alliance (UPA) government offered to set up one of the two major ports it planned to construct on the eastern coast of India. Of this, one was sanctioned to West Bengal, and which has almost reached 80 per cent completion.

But at a later period, Tirupati MP Chintha Mohan succeeded in pressurising the Manmohan Singh government by securing signatures from several MPs to shift the Ramayapatnam port plan to Dugarajapatnam of Nellore district in 2013. It is learnt that vested interests were behind the Tirupati MP’s move.

However, once again, Ramayapatnam was put forward for government consideration after Finance Minister Arun Jaitley recently told the Andhra Pradesh government, when questions arose over fulfilment of assurances given under the AP Reorganisation Act 2014, that Dugarajapatnam was not a viable option for a port due to security reasons. He said that the NITI Aayog faced strong objection from the Indian Space Research Organisation (ISRO), which feared such a port would be a security threat to Sriharikota Space Centre nearby. Jaitley suggested the AP government chooses some other suitable location for the Centre to go ahead with the construction of a major port.

Prakasam district is one of the backward districts of the state and in a way border district for backward Rayalaseema region and prosperous coastal districts. No major industry is located in this district. Setting up a port here would certainly facilitate faster economic growth of this region.

During the UPA regime, initially experts identified three locations suitable for a new port in Andhra Pradesh. They are Nakkapalli of Visakhapatnam district, Ramayapatnam of Prakasam district and Dugarajapatnam of Nellore district. However, in view of major ports located in Visakhapatnam and Kakinada, besides one more new port at Gangavaram, Nakkapalli was ruled out. Dugarajapatnam was also deferred as a new port is coming up in the vicinity of Krishnapatnam.

In the absence of effective persuasion from the state government almost five years had lapsed without even any ground breaking for the second major port sanctioned for the state at a total outlay of Rs 25,000 crore. The fresh feasibility survey conducted by NITI Aayog, commissioning international consultants, established that the decision taken by the then UPA regime on 19 May 2013 selecting Dugarajapatnam for the construction of the second major port was politically wrong.

Now it is high time for the both state and central governments to go ahead with Ramayapatnam, without wasting more years in the name of searching for a suitable location. In all respects, Ramayapatnam is highly advantageous as well for importers and exporters in the hinterland.

With a seafront of 9.71 kilometres, the port at this place could accommodate more than 30 berths and the ship building unit. Asides, Government of India can also locate its petro complex at Ramayapatnam, presently proposed at Kakinada, which would generate high additional cargo to Ramayapatnam port and better its profits.

Undoubtedly, Ramayapatnam is going to be an ideal and convenient port for exporters and importers in the hinterland i.e. Nellore, Prakasam, Guntur Districts, Rayalaseema region, adjourned districts of Telangana state, southern parts of Karnataka and Maharastra, besides Chhattisgarh.

The present annual exports of about 30 lakh tonnes of tobacco, chillies, granite, cotton, cotton yarn , textiles, salt, coffee, maize, quartz , chemicals, aqua and other food grains etc., worth more than Rs25,000 crore can be routed through the nearest Ramayapatnam port. Likewise, the present imports of lakhs of tonnes of fertilisers, edible oils, petrol and diesel, coal, machinery by the people and industry in the said hinterland can also be imported through this port at a lesser cost incurred for inland transport.

Exporters and importers from Telangana are also likely to prefer Ramayapatnam, which is 370 km away as opposed to the preferred ports of Mumbai at 740km and Vishakhapatnam 620km.

Petroleum Complex

Besides the benefits Ramayapatnam port can provide the people from this region, it is also worthwhile to examine the potential of setting up the proposed petroleum complex in this backward district. The AP Reorganisation Act is also proposing to set up a petroleum complex by GIAL-HPCL Consortium in Andhra Pradesh, the location of which is preferred near Kakinada.

But after a detailed technical study, the consortium found a feasibility gap of Rs 975 crore per year for a period of 15 years from zero date repayable over next 15 years. On net present value basis, it amounts to a onetime payment of Rs 5615 crore.

It would be almost impossible for the state government to meet this viability gap. Moreover, as areas surrounding Kakinada are fertile lands it would be difficult to acquire more lands for promotion of related industries there. As most of petroleum industries are located around Visakhapatnam and Kakinada, consumers of two Telugu states are now forced to pay high prices for petrol and diesel, as they need to bear transport cost from Visakhapatnam.

Location of the petroleum complex in Prakasam district would help to save transport cost substantially, besides enabling the government to acquire land easily. It would also help develop the Prakasam district. Presently, no major industry is located in this district.

Andhra Pradesh Chief Minister Chandrababu Naidu, who promised decentralised growth of the state, has been making efforts to develop some major industries in each district. But till now, no such effort was made with regard to Prakasam district. Locating both port and the petroleum complex in this district will certainly provide logistic benefits. This would really cut inland transport costs to move port of loading (POL), instead of moving from Visakhapatnam far away.