APSEZ calls off deal to build greenfield port at Bhavanapadu
It didn’t enter concession agreement for a year citing issues related to land acquisition
Adani Ports and Special Economic Zone (APSEZ) has called off deal to build a greenfield port at Bhavanapadu in Srikakulam district of Andhra Pradesh after it bought Krishnapatnam port for Rs 13,500 crore in January 2020.
APSEZ had won the contract in January 2018 in an auction to develop a new port at Bhavanapadu.
The deal was cancelled by mutual consent in March 2020. APSEZ didn’t enter concession agreement for a year citing issues related to land acquisition, etc.
APSEZ had agreed to share 2.3% of the gross revenue with the Andhra Pradesh government for the first 30 years, 4.6% for the next 10 years and 9.2% for the balance period of the contract.
In May 2018, APSEZ incorporated a wholly-owned subsidiary Adani Bhavanapadu Port (ABPPL) to construct the port with an investment of Rs 5,000 crore.
APSEZ signed a pact to buy 75% stake in Krishnapatnam Port Company, the entity that runs a private deep-water port at Krishnapatnam in Nellore district of Andhra Pradesh, for a consideration of Rs 13,500 crore on 3 January 2020.
The equity portion of the Krishnapatnam deal excluding the debt held by the port operating company of about Rs 7,500 crore is valued at about Rs 6,000 crore of which APSEZ paid about Rs 4,500 crore for the 75% stake.
The Andhra Pradesh government has sought bids to hire a project management consultancy firm to develop the new port at Bhavanapadu on a landlord model.
Under the model, the Andhra Pradesh government will finance basic infrastructure of the port such as dredging, reclamation, breakwater and land acquisition and outsource operations to private firms who will procure heavy duty cranes and other infrastructure required at the berths to handle cargo.