Gangavaram Port Limited

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Government of Andhra Pradesh (GoAP) awarded a 30 year build-own-transfer (BOT) to Gangavaram Port Limited in July 2002, to develop a new deep water port in Gangavaram, Vishakhapatnam district, Andhra Pradesh State, India. The port was initially expected to have five berths and a cargo handling capacity of 35 million tons per annum. The new port at Gangavaram was expected to complement and decongest the nearby Vishakhapatnam Port. This BOT contract was the result of Government of India’s (GOI) commitment to encourage private investments to augment and upgrade the country’s port capacity. To this effect, GOI took several policy initiatives. Of these, the guidelines issued in October 1996 was the most comprehensive, facilitating private sector participation in the construction and operation of additional assets such as container terminals and cargo berths. Gangavaram Port Limited (GPL) was jointly owned by Dubai based DP World, Hyderabad based entrepreneur Mr. D.V.S. Raju and GoAP. For a 11 % share in GPL, GoAP gave 1800 acres of land for the project, and assured the sponsors that it will provide external infrastructure such as roads, power supply and water supply up to the port boundary. The consortium led by Mr. Raju was selected to develop the greenfield port in an international competitive tender conducted by Andhra Pradesh Industrial Infrastructure Corporation Limited (GoAP) in May 2002. The total cost of the project was estimated at US$ 385.5 million. The project reached financial closure in December 2005, with a debt-equity ratio of 70:30. Thirteen Indian banks, led by SBI Capital Markets Ltd., raised long term non-recourse debt worth US$ 265.3 million for the project. The loan had a 14 year term and was arranged at an interest rate of 8.75%. Gangavaram port was designated as a minor port. All major ports in India are administered by the central government while the minor ports are administered by the respective state maritime boards under the Indian Ports Act 1908. In terms of tariff setting, the major ports came under the Tariff Authority for Major Ports while the minor ports had the freedom to fix their own tariff. Construction of the project began in December 2005 and the port was expected to begin commercial operations by December 2007.But it started its commercial operations in December 2009. Do not know how to enter the details of Mr. DVS Raju, who is the leading sponsor. http://www.ppp.ap.gov.in/ProjectDesc.aspx?Recordkey='39' http://www.gangavaram.com/aboutus.html