To improve its overall efficiency and fight the stiff competition from private ports such as Gangavaram Port, the 87-year-old VPT has taken up several projects under the public-private partnership (PPP) model during the past six to seven years.
But all is not well with some of the PPP projects, as they are facing rough weather due to adverse market conditions as well as a rigid tariff structure imposed upon the major ports by the Tariff Authority for Major Ports (TAMP).
Vizag general cargo berth in the outer harbour was awarded in 2010 to the Vedanta group for 30 years under the PPP model and a fully mechanised cargo-handling berth was built at a cost of ₹ 640 crore for coking coal and steam coke.
The major project with a 10-million tonne capacity per annum is now facing the heat, as it is unable to compete with the neighbouring Gangavaram port, “as the differential and flexible terms offered by the private port have eroded the competitiveness of our terminal," says Manish Gupta, head of ports, Vedanta Limited.
He further said abnormal storage charges are making cargo-handling uneconomical at the general cargo berth in Vizag port.
According to him, importers are preferring Gangavaram port, as the private port is offering them free storage for 90 days as against only 10 days at our terminal in accordance with TAMP guidelines.
He said PPP projects under the 2008 tariff regime of the TAMP in particular are facing great difficulties. Three other berths in VPT under the PPP model, built by Adani group, SEW and Alba, are facing the heat.
According to him to make the projects viable, TAMP should offer relief on the storage charges and the free storage period should be hiked to 90 days.
