VIJAYAWADA: The State government on Thursday cancelled the Machilipatnam Port Private Limited Concession Agreement to develop a deepwater port in Machilipatnam and also for the resumption of 412.57 acres of land handed over to the concessionaire on lease. The government also said it would claim compensation for the damages suffered by it from Machilipatnam Port Private Limited.
The cancellation of the agreement came as a blow to the Navayuga Engineering Company Limited, which is the lead promoter of the Machilipatnam Port project as the government had already decided to pre-close the tenders awarded to the same firm for Polavaram project.
The government’s decision came in the wake of allegations by the opposition TDP that the YSRC regime was planning to hand over Machilipatnam Port to the Telangana government in lieu of alleged financial assistance extended by the TRS during the elections. Though the project was conceived 11 years ago, no progress was made in its execution. It is learnt that the government plans to develop the port by forming a consortium of public sector undertakings like the Visakhapatnam Port Trust.
The development of Machilipatnam port was conceived in 2008 and the project was awarded to a consortium comprising Maytas Infra Pvt Ltd, NCC, SREI-SCC and a special purpose vehicle Vajra Sea Port Pvt Ltd was incorporated by the developer to implement the terms and conditions of the concession agreement to be entered into by the parties. Vajra Sea Port Pvt Ltd renamed as Machilipatnam Port Pvt Ltd was held by the members of the consortium, with Maytas Infra holding a share of 40%, NCC Limited 11%, SREI Infrastructure Finance 38% and Sarat Chatterjee and Company Visakhapatnam Pvt Ltd 11%. In the later stage, a letter was addressed by the Machilipatnam Port, indicating that NCC was authorised to identify the lead promoter and strategic partner in view of the exit of SREI and SCPL and Maytas inability to carry forward the project and the government permitted the induction of Navayuga Engineering Company Limited as the lead promoter of the Machilipatnam Port project.
In terms of the revised concession agreement, the commencement date would be June 7, 2010 and the deadline for financial closure would be 12 months from the zero date (commencement date). However, they had not achieved the financial closure till August 2014.
In August 2014, in a letter while forwarding the revised DPR, the Machilipatnam Port Limited requested the government to extend the time for financial closure (3 years after the date agreed for the financial closure) and other milestones. The government in September 2015 extended the milestones and issued orders approving the modified DPR for Phase 1 - Stage 1 and the revised master plan of Machilipatnam Port.
As per the revised DPR, Phase 1 - Stage 1 was proposed to be completed by 2017-18 and (overall Phase I) Stage I and Stage II were proposed to be completed by 2021-22 and capital cost estimates for Phase 1 - Stage 1 and Stage I and Stage II were `6,778 crore and `1,1924 crore respectively.
In March 2017, the Department of Ports acquired land to an extent of 2,985 acres and asked the developer to take over the land for the project execution.