The Visakhapatnam Port Authority (VPA) has proposed acquiring a 49-50 per cent equity stake in Mulapeta Port, which is being developed by the Andhra Pradesh government. The proposal is intended to expand maritime capacity, shift bulk cargo operations from Visakhapatnam and ease congestion at the existing facility.

VPA has sought an investment in the special purpose vehicle (SPV) established for Mulapeta Port, along with two berths in Phase 1 and another two in Phase 2. The authority has said the proposed arrangements would improve the port’s commercial viability while giving it additional capacity to manage rising cargo volumes.

The Andhra Pradesh government is examining the proposal through a Group of Ministers comprising Finance Minister Payyavula Keshav, Investment Minister BC Janardhan Reddy and Tourism Minister Kandula Durgesh. The panel will assess the technical, administrative and financial aspects before the matter is presented to the state Cabinet for a final decision.

VPA has also requested a fair-value assessment of salt lands proposed for transfer to the port SPV. The land and equity arrangements will form an important part of the project’s financial structure and determine how the central and state governments participate in developing and operating the facility.

Mulapeta Port, located in Srikakulam district, is planned as a greenfield multipurpose port. Its first phase, estimated at Rs. 36.7 bn, will include four berths and annual capacity of 23.5 mn t, with three berths for general cargo and one for coal. VPA has prepared a detailed project report for the second phase and had earlier considered investing about Rs. 15 bn in a larger facility and an adjacent port-based industrial hub. The proposed relocation of coal and iron ore handling could reduce congestion, vessel turnaround times, demurrage costs and pollution near Visakhapatnam. The project’s wider success will depend on supporting road and rail links, land availability and agreement on ownership terms.