The Visakhapatnam Port Trust has decided to terminate the concession agreement it had signed with the Adani Group on August 1, 2011, for its failure to operate and pay 40.19% of gross revenue share for a long time.
The Adani Group, which developed the greenfield coal berth at East Quay-1 berth at an estimated cost of ₹323.18 crore to handle 6.41 million tonne per annum in a mechanised environment, had formed the Adani Vizag Coal Terminal Private Limited (AVCTPL), a special purpose vehicle to implement the project.
After facing allegations of using trucks by the Vizag Seaports Private Limited, the first BOT operator of the VPT, which runs two multi-cargo berths, the AVCTPL received a shutdown notice with a penalty of ₹20 lakh from the AP Pollution Control Board about two years ago.
“Now, we have decided to cancel the concession agreement with Adani. The future course of action will be decided later after taking everything into consideration,” VPT Chairman M.T. Krishna Babu told The Hindu .
During the Consent for Establishment meeting in November 2011, the APPCB had told clearly that the berth to stack pileup to final despatch was strictly barred by trucks/dumpers.
At a recent meeting to discuss takeover of the berth by the VPT, a top representative of the Adani Group was advised to run various facilities occasionally so as to prevent them from turning into scrap. The group had already informed the port that it was not in a position to run the berth.
Bone of contention
Reliable sources said that the bone of contention was the total amount invested by Adani, which it claims to be at ₹365 crore. Moreover, the loans obtained from the bank were later cleared by transferring to another financial institution. Hence, the port had to find out whether it had to consult the new lender or take a decision on its own as per the concession agreement and rules governing the public private partnership (PPP) projects.
After the legal hurdles, the port, sources said, would take a final decision whether to run it on its own by converting it into a multi-commodity berth as the demand for imported coal had come down drastically following thrust on increasing domestic coal production, or give it on operation and maintenance basis to another company, or put it up for outright sale.
