Kakinada Port

active

Andhra Pradesh authorities first initiated the process of offering development of 12 minor ports on a 30-year lease on a build, operate, transfer (BOT) basis in 1994. At the time, it could elicit proposals for just four: Kakinada, Gangavaram, Krishnapatnam and Vodarevu. International Seaports Private Ltd (ISP) - a joint venture of Larsen and Toubro, India, Precious Shipping Ltd, Thailand and SSA International, US was awarded the contract to develop Kakinada port on an operation, maintenance, share and transfer (OMST) basis out of four firms (Konsortium Perkepalan Berhad, Malaysia, Mumbai-based ABG Heavy Industries, Continental Warehousing Corporation in association with Pembinaan Redzai Sendirian Berhad of Malaysia) that had been listed after a perusal of global bids in Sept. 1998. The four groups were the only ones to submit technical bids out of the 14 companies shortlisted from 35 pre-qualification bidders who had responded to the global tender for privatisation of the port. The port currently has three berths, developed with a loan of approximately US$72m from the Asian Development Bank. A fourth berth will be constructed by the consortium, which will also develop the hinterland, investing around US$63.5m in the project. As per the decision of the cabinet, the lease period will be 20 years. During the initial phase, International Seaports will be required to pass on 20% of the gross income to the state government. The figure will go up to 22% in subsequent years. The private sponsors took over the port operations in April 1999. In 2012-13, the port underwent expansion - the project entailed development and construction of the marine and offshore facility catering to the offshore vessels and ships located in Kakinada Port. Expected operating start date was March 2013 for this expansion Phase. Funding for the expansion project was closed on 4th March 2013 with a debt equity ratio of 73:27.The estimated capital cost of the expansion was US$ 158.9mn. Financing comprised a 7-year 9-months term loan of US$ 115mn and sponsor equity of US$ 37.89mn.The term loan was priced at 467 basis points over the prevailing 3-month LIBOR, and a repayment schedule of 28 quarterly installments.The loan was arranged by Axis Bank, and the participating banks were Bank of India (US$ 20mn), Union Bank of India (US$ 20mn), Indian Overseas Bank Ltd (US$ 15mn). http://www.ppp.ap.gov.in/ProjectDesc.aspx?Recordkey='338'