Rites to study revenue sharing of second container berth at Vizag port

Visakhapatnam port has appointed consultant company Rites to study the revenue sharing model of the Rs 634-crore second container berth proposed by Visakha Container Terminal Private Limited (VCTPL).

Visakha Container is jointly promoted by Dubai Port world and United Liner Agencies of India and has been operating the container terminal at Vizag port from 2008.

In 2008-09, the company handled 80,000 container boxes, which increased to more than 250,000 boxes last fiscal. In view of this growth, the port decided to set up a second container berth in public-private partnership and invited global tenders. Though about seven major companies like Adani Port, Navayuga Engineering, Gangavaram port, VCTPL, responded to it, VCTPL was the only company that submitted the financial bid.

However, the port is of the view that the revenue offered by VCTPL is unattractive. "VCTPL is the only company to have submitted the financial bid for the Rs 634 crore container terminal project, but it has offered very low revenue to Vizag port," port sources told Business Standard.

The sources said VCTPL had justified the revenue stating it would take a long time to break even. Hence, even though VCTPL is the sole bidder, the port has not awarded the project to it. The port is now awaiting the report from Rites before going ahead with awarding the project.

Vizag port has a handling capacity of 500,000 containers per year and this would increase to 540,000 containers upon completion of the second berth.