Govt dismisses oppn charge on minor port project location

'Viability factor behind change of location'.

The Andhra Pradesh government today clarified that the selection of location for the proposed minor port in Krishna district was purely based on the developer's perception of its viability rather than any other considerations, even as the Maytas-NCC consortium, which has received the letter of intent to develop the port, has made a bank guarantee to the tune of Rs 10 crore for the same.

Responding to the objections raised by the opposition Telugu Desam members on the change of location of the proposed port to Gogileru from the historic port town of Machilipatnam, chief minister Y S Rajasekhara Reddy pointed out that the private developer had chosen the former as it would reduce the capital cost to the tune of Rs 200 crore thereby increasing the project viability.

Besides sea coast being shallow at Machilipatnam, the developer would have to incur recurring expenditure of at least Rs 10 crore a year as the location is prone to siltation unlike Gogileru, which is 30 km away from the present port, according to the chief minister.

However, keeping in mind the sentiments of the opposition members the private developers was asked to relook at the proposal besides considering one more location close to Machilipatnam, he said.

While citing the opinion of the RITES consultancy firm, which was appointed by the previous government to give the feasibility report on the Machilipatnam port development to substantiate the decision on change of the location, the chief minister said that obstinate insistence on Machilipatnam may force the developer to backout from the project.

The Maytas-NCC-Srei& SCC consortium had emerged as the sole bidder for the Rs 1,200-crore port project during the final round as Machilipatnam was considered by many as unviable due to lack of adequate hinterland besides other factors.

Among the consortium partners, Maytas holds 40 per cent equity in the project followed by SREI with 38 per cent stake while NCC and SCC hold 11 per cent equity each.

According to the officials, the Maytas-NCC consortium has also proposed to develop an SEZ in continuation of the the port project seeking over 3,000 acres of land for this purpose during the course of bid negotiations.

"Since the government had invited bids for the port development their request was not acceptable at this stage," an official told Business Standard.