Visakhapatnam Port Authority cancels IMC Ltd’s PPP Berth contract

VISAKHAPATNAM : The state-owned Visakhapatnam Port Authority has terminated a contract with AVR Infra Pvt Ltd (AIPL), a subsidiary of Chennai-based IMC Ltd, just a few years into the 30-year concession. The agreement, which involved developing and operating the Eastern Quay Berth-10 (EQ-10) at the southern port, was canceled due to AIPL’s failure to meet the minimum guaranteed throughput (MGT) obligations, according to a senior official. IMC Ltd is India’s leading independent bulk liquid storage company.

The concession agreement for the 1.84 million tonnes (mt) capacity EQ-10 berth located in the northern arm of the inner harbour of Visakhapatnam port was signed on 16 August 2010 for handling liquid cargo (Class B & C chemicals including caustic soda, phosphoric acid, edible oil, biofuel, etc).

AVR Infra quoted the highest revenue share of 19.08% to the port authority to emerge the successful bidder for the project in a tender. The terminal started commercial operations in January 2017.

This is the fourth public-private-partnership (PPP) project to end in termination for multiple reasons in the last few years at Visakhapatnam port. The EQ-10 berth, though, is debt free and this absolves the port authority from paying 90 percent of the debt due as termination payment per the concession agreement.