Krishnapatnam Port to develop industrial hub

Krishnapatnam Port has put its capacity expansion plan on hold for this year and will instead focus on developing the adjacent industrial smart city.

"We are looking at setting up cargo-based industry at this hub as this will ensure an assured clientele for the port," Chinta Sasidhar, managing director of Krishnapatnam Port, told Business Standard.

Indian ports are under pressure because economic growth is tepid. Port authorities are looking at different ways of reviving business.

Krishnapatnam Port in Andhra Pradesh has a capacity of handling 70 million tonnes of cargo a year and is planning to raise this to 200 million tonnes by 2020. The port handled 40.7 million tonnes of cargo in 2014-15, using 57 per cent of its capacity.

"Had we seen any cargo growth potential for the port, we would have added at least four berths to the current 11. But that needs strong economic growth and we are not in a hurry to expand," Sasidhar said.

The industrial hub, located in the Nellore district of Andhra Pradesh, will cost Rs 10,000-11,000 crore and will be spread over 14,000 acres, of which the port owns 6,000 acres. The hub will house power plants and refineries among other units.

"The Centre is pooling land for the project," Sasidhar said. The industrial smart city is among the ones announced in the 2014-15 Union budget.

"About Rs 2,000-3,000 crore is needed for pooling land. This is being spent by the Centre and the process should take about six months," Sasidhar said.

Although the funding pattern for the project is not known, the Japan International Cooperation Agency (JICA) will be among the main investors.

"The government, the port company and the JICA will form a special purpose vehicle for this project. The JICA will be able to raise loans at 2-3 per cent interest and this is one of the key points in the funding plan," said Sasidhar.

The Hyderabad-based CVR Group owns 91 per cent of Krishnapatnam Port and the balance 9 per cent is held by the London-based equity firm 3i Group. The port handles bulk cargo like iron ore, coal, fertilisers, edible oils and containers.

Krishnapatnam Port today signed a MoU with Petrogas and the government of AP for setting up a liquified natural gas terminal. Petrogas will commit an investment of Rs 3,000 crore for the terminal that will have a capacity of 10 million tonnes in the next three years.