Andhra Pradesh govt selects Adani Ports to develop Bhavanapadu Port

Andhra Pradesh government has finally approved lone bidder Adani Ports and SEZ Limited as the developer of Bhavanapadu Port project after negotiating for a higher revenue share with the company.

Located in the north-coastal district of Srikakulam, the proposed port would serve the hinterlands of Odisha and Chattisgarh and nearby districts in AP. It would also help expand the company's footprint in South on the eastern sea coast.

Adani Ports was the only company out of the three short-listed firms to submit the financial bid for the port project in 2016. Navayuga and Gangavaram Port Limited, the two home-grown port operators midway through the race mid-way.

The authorities went ahead and opened the sole financial bid of Adani Ports to complete the selection process. However, they felt 0.5 per cent revenue share offered by the company was very low and initiated the negotiations for a revised revenue share formula before taking a final call on awarding the project.

"As per the the revised proposal, the company would give 2.3 per cent of the port revenues as a share to the government for the first 30 years, 4.6 per cent share for the next 10 years followed by 9.2 per cent revenue share thereafter," Ajai Jain, principal secretary, department of Infrastructure and Investments told Business Standard.

The government will hand over 2,500 acres of land along with waterfront to the port developer to create logistics and industrial infrastructure besides the port. The initial phase of the project includes the development of five berths. The project concessionaire is expected to invest around Rs 30 billion on port development and other infrastructure.

The country's largest multi-port operator had entered South India in 2016 by acquiring Kattupalli port for about Rs 20 billion from L&T Ship Building Limited in Tamil Nadu.

Meanwhile, the state cabinet at its meeting on Saturday decided to cancel the bids of the Bhogapuram International Airport project to facilitate a revised tender incorporating additional elements like the establishment of MRO facility in the project.

The Airports Authority of India (AAI) had emerged as L1 by offering 31 percent revenue share to the state government for the proposed green-field airport project in over 4,000 acres of land. GMR Group, the only other bidder in the fray, came second with an offer of 21.6 per cent revenue share.