Andhra Pradesh Chief Minister Y S Jagan Mohan Reddy on Wednesday, July 20, conducted the 'bhoomi puja' for the construction of a minor port at Ramayapatnam. The first phase of the port development works is expected to cost Rs 3,736 crore. Former Chief Minister N Chandrababu Naidu had on January 9, 2019, laid the foundation stone for the Ramayapatnam port and the current Cabinet of Jagan twice cleared the proposals (on December 27, 2019, and March 4, 2020) for developing the port.
The Jagan Cabinet had also then approved the Detailed Project Report prepared by RITES. The state government selected Ramayapatnam (now in SPS Nellore district after the reorganisation) for developing a new deep-water port in lieu of the Dugarajapatnam port, proposed under the AP Reorganisation Act, 2014 after the latter was found unviable. Accordingly, a DPR has been prepared, estimating the project cost to be Rs 10,009 crore in three phases. As per the DPR, the port will have 16 berths with a total handling capacity of 138.54 million tonnes per annum.
An extent of 3,634 acres of land is required for the port, of which 3,093 acres have to be acquired. Initially, the state said it would develop the new port on its own but later sent several requests to the Union government for funds. The Union government has virtually rejected the state's request for financial assistance for the port development, in lieu of Dugarajapatnam, since Ramayapatnam has been notified as a minor port, which comes under the jurisdiction of the AP Maritime Board of the state government.
The incumbent government previously announced that the port development works would commence in February 2021 and CM Jagan said in March 2021 that it would become operational by the year 2023. However, the deadline has now been reset to July 30, 2025, for Phase 1. While 850.34 acres of land is required for the Phase 1 works, where four berths are to be constructed, so far 255.34 acres have been acquired, according to the APMB data. As against the requirement of Rs 264.94 crore for land acquisition and rehabilitation and resettlement of villagers, the government so far released Rs 80 crore.
The state government had in February 2020 said the Asian Infrastructure Investment Bank (AIIB) was ready to lend three billion USD for major infrastructure projects, including Ramayapatnam port, but that never materialised. The state government in April this year agreed to extend guarantee to the APMB to borrow Rs 2,079 crore for the Ramayapatnam port from lenders (and another Rs 6,662 crore for two other proposed ports) but the authorities concerned are tightlipped on whether or not any banks have agreed to lend the money. Sources in the APMB said the state's equity component of Rs 4,313 crore (for three ports) has not yet been fully covered.
“We were required to infuse equity of Rs 2,157 crore upfront for raising required debt so that the project development works could be initiated and sustained for the first 18 months. But there are many shortfalls in that regard,” a senior official of APMB said. The APMB had to securitise its future cash flows to raise Rs 1,500 crore in the first place towards equity infusion.