VPT-APSEZ price war on cards

Visakhapatnam: WITH the Andhra Pradesh Government giving its approval for selling its 10.4 per cent stake in Gangavaram Port Limited (GPL) facilitating complete acquisition by Adani Ports Special Economic Zone (APSEZ) within a month or so, the price war with its main rival Visakhapatnam Port Trust (VPT)-a major port owned by the Central Government is expected to deepen further.

While Visakhapatnam Port set up in 1933 comes under Tariff Authority for Major Ports (TAMP) regime, minor ports like Gangavaram have the freedom to finalise their own tariff. Before Adani bought controlling stake in Gangavaram Port from DVS Raju-led consortium and others, there was diversion of traffic from the major port due to offers of discounts.

To prevent diversion, Visakhapatnam Port Boston Consulting Group (BCG) was engaged to improve techno-economic parameters for faster evacuation of cargo, when Nitin Gadkari was the Minister for Surface Transport. Based on its recommendation, the turnaround time of ships was reduced along with introduction of rebates in storage and other charges.

"With aggressive marketing by GPL post-acquisition and Krishnapatnam, Dhamra and Ennore ports coming under the ownership of APSEZ, more traffic will get diverted to Gangavaram," a senior official of a stevedoring company told Bizz Buzz on Wednesday.

AP Maritime Board based on the recommendations of the Empowered Committee of Secretaries led by Chief Commissioner of Land Administration Neerabh Kumar Prasad has recently approved the sale of the government's share of 10.40 per cent for Rs 644.78 crore. The equity in Gangavaram Port to the government was given in the PPP project in lieu of 1,800 acres given for construction of the minor port on the backyard of Visakhapatnam Steel Plant.

Gangavaram Port has nine berths with an annual cargo handling capacity of 64 million tonnes. It handled 32.81 million tonnes during the last fiscal. Visakhapatnam Port has a capacity to handle 120 million tonnes. Gangavaram Port has a plan to expand its capacity to 250 million tonnes with 31 berths as it has a natural draft and huge waterfront area.

Now it handles dry and break bulk cargo. There is speculation that post-acquisition, Gangavaram Port will foray into container traffic. Visakha Container Terminal Private Limited (VCTPL) owned by JM Baxi & Co, which developed a dedicated container terminal as a BOT operator, is now expanding capacity with an additional 395-metre-24long berth.

This will enhance its capacity from 0.7 to 1.3 million TEUs at a cost of Rs 633.11 crore. Visakhapatnam Port handled a throughput of 69.84 million tonnes with an operating surplus of Rs 698 crore during 2020-21.