Andhra Pradesh: CM YS Jagan Mohan Reddy Lays Foundation Stone For Ramayapatnam Port

by V Bhagya Subhashini - Jul 20, 2022 03:46 PM +05:30 IST
Andhra Pradesh: CM YS Jagan Mohan Reddy Lays Foundation Stone For Ramayapatnam PortAndhra CM YS Jagan performing bhoomi puja at Ramayapatnam port (The New Indian Express)

Andhra Pradesh Chief Minister YS Jagan Mohan Reddy has performed the Bhoomi Pooja of Greenfield Ramayapatnam Port construction project today (20 July).

The Ramayapatnam port is planned to be built in two phases. The first phase is estimated to cost 3,736 crores. It is proposed to have four berths, including one coal berth, two container berths and one multipurpose berth with a cargo handling capacity of 25 million tonnes.

The cargo handling capacity will be increased by 113.63 million tonnes in phase 2 with an investment of Rs 6,904 crore, bringing the total capacity to 138.54 million tonnes a year from 19 berths.

The project will be developed by Ramayapatnam Port Development Corporation Limited under the auspices of the Andhra Pradesh Maritime Board. The AP Maritime Board is the state government agency responsible for developing ports in the state.

The AP government has set the target to complete the first phase of works in 36 months.

Ramayapatnam is a coastal village in Gudluru Mandal of Nellore District. The port is located 4.5 km from the National Highway and 93 km North of Krishnapatnam Port.

Proposed Ramayapatnam Port Limit ( Govt of AP)
Proposed Ramayapatnam Port Limit ( Govt of AP)
Ports on the Andhra Pradesh coast.
Ports on the Andhra Pradesh coast.

Karikala Valavan, Special Chief Secretary to the Government for Industries and Commerce, stated that land acquisition for the Ramayapatnam port is almost completed. Not only will the port development benefit the two districts, but the establishment of industries in the region will provide job opportunities for thousands of people.

The AP government is building Ramayapatnam port on Engineering, Procurement, and Construction (EPC) model, which includes building the breakwater, cargo berths, and raising the channel.

The AP Maritime Board awarded the EPC contract for Ramayapatnam port to a joint venture of Hyderabad-based Aurobindo Realty and Infrastructure Pvt. Ltd and Navayuga Engineering Co Ltd in July 2021.

After EPC work at Ramayapatnam ports is completed, the AP government plans to bid cargo handling operations out to specialists.

The AP Maritime Board suggested the state government use the Operations and Maintenance (O&M) model rather than put out PPP bids for individual cargo berths in order to operate the ports once they are built, as per the Economic Times report.

“We realised is there is no fun in earning revenue share of 2-3 per cent as in case of some fully privatised ports. In contrast, we are getting a revenue share of 22% from the Kakinada deep water port which was built by the State Government in 1998 and given to a private firm under the O&M model,” the AP Maritime board official said.

“We have suggested to the government to adapt to run the port on O&M model like the Kakinada deep water pot you are expecting a revenue share of 22 to 25% from each of the three new ports that give good money” the official added.

Under the EPC model, the government is in charge of acquiring land, securing environmental and CRZ clearance, and allocating funds for projects.

The AP Maritime Board has got management and CRZ approval for the Ramayapatnam port. It has also secured funding and equity for the Ramayapatnam port through a securitization deal for Rs 1,500 crore and borrowings from a group of banks led by the State Bank of India (SBI).

The securitization deal aided the AP Maritime Board in reaching financial closure for the Ramayapatnam port, which included 1400 crores in equity and 2070 crores in debt.

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