AP ports anchoring Adani SEZ's expansion

KRISHNAPATNAM and Gangavaram ports will play a key role to enable Adani Ports and Special Economic Zone (APSEZ)'s ambitious plan to increase cargo handling to 500 million tonne, capturing a market share of 40 per cent by 2025.

Billionaire Gautam Adani-owned APSEZ, which now handles 247 million tonne with a market share of 25 per cent has been registering phenomenal growth year-on-year with its acquisition and expansion plans. According to annual report for FY21, it has registered a growth of 11 per cent over previous year. The all India growth of ports is 5 per cent. APSEZ, which has plans to become most preferred logistics partner, has infrastructure in 11 ports spread over Gujarat, Odisha, Goa, Kerala, Andhra Pradesh, Tamil Nadu. Both Krishnapatnam and Gangavaram can handle Cape size vessels with 2,00,000 deadweight tonnage (DWT).

APSEZ has completed 100 per cent acquisition of Krishnapatnam Port, which has huge land bank. The port has an annual capacity of 64 million tonne. It will be enhanced to 300 million tonne as per its master plan. The Adani Group increased its equity holding from 75 per cent to 100 per cent in Krishnapatnam Port by acquiring 25 per cent stake owned by Vishwamudra Holdings for an amount of Rs 2,800 crore.

On the other hand, the Adani Group is making fast moves to complete 100 per cent acquisition of Gangavaram Port Limited (GPL), an all-weather deep-water port located close to Visakhapatnam Port, one of the premier major ports owned by the Government of India. Gangavaram Port, developed under PPP mode, at present has a capacity to handle a throughput of 64 million tonne, which can be increased to 250 million tonne with 31 berths in future.

The Competition Commission of India recently approved acquisition of 89.6 per cent shareholding in Gangavaram Port including 31.5 by Warburg Pincus under Section 31 (1) of Competition Act, 2002 by APSEZ. DVS Raju and family, which held a stake of 58.1 sold their shareholding for Rs 3,604 crore. Andhra Pradesh Government, which has 10.40 per cent equity in the port in lieu of land given to the project has agreed in principle to sell it to APSEZ for Rs 645.1 crore. Gangavaram Port, which gives a dividend of Rs 22 crore to the project proponent, has a free-holding land of 1,800 acres on the backyard of Visakhapatnam Steel Plant.

At present, an Empowered Committee of Secretaries led by Chief Commissioner of Land Administration Neerabh Kumar Prasad is studying the modalities for sell of State's stake to APSEZ.

A senior government official told Bizz Buzz that Gangavaram Port could increase cargo handling from 32-35 million tonne per annum to 40-45 million tonne in a short term to fetch a revenue of Rs 30 crore per annum to them. APSEZ has been told by the government to form a Special Purpose Company to sign a revised concession agreement.