The order issued by the department of industry, infrastructure, investment and commerce made it clear that the government reserved the liberty to claim compensation for the damages suffered by the government from Machilipatnam Port Private Limited (MPPL).
After cancelling the Polavaram irrigation project last week, the Andhra Pradesh government has now struck down the concession agreement for development of Machilipatnam port in Krishna district due to inordinate delay.
The state government has issued an order resuming 412 acre of land which was given on lease for the port project. The order issued by the department of industry, infrastructure, investment and commerce made it clear that the government reserved the liberty to claim compensation for the damages suffered by the government from Machilipatnam Port Private Limited (MPPL).
It was in February this year that former chief minister N Chandrababu Naidu had laid the foundation stone for the greenfield, all-weather multi-purpose deep sea port near Amaravati to be constructed at an estimated cost of Rs 12,000 crore.
The Machilipatnam port project was conceived in 2008 and work was awarded to a consortium led by Maytas Infra-NCC-SREI-SCC. A special purpose vehicle (SPV), Vajra Sea Port, was incorporated to implement the terms and conditions of the concession agreement. The state government later replaced Maytas, promoted by the family of Satyam Computer Services founder B Ramalinga Raju, with Navayuga Engineering Company (NECL) as the lead promoter of the project and a revised concession agreement was entered into between the government and Machilipatnam Port. However, no progress was made in the project since 2008 except for repeated extensions and further concessions.
“In order to support the project, the government also took on an onerous obligation of meeting the additional estimated cost of Rs 335 crore due to the change in the location, if the consortium achieves financial closure. The intent of the government and the lack of the intent on the part of the company is shown in the fact that inspite of so many incentives proposed, no port-related work has commenced on the ground,” the GO from the state government said.
Meanwhile, the Opposition Telugu Desam Party (TDP) alleged that YSR Congress Party (YSRCP) government is trying to handover Machilipatnam port to the Telangana government. However, the YSRCP denied the allegations.
The port is the second major project to be cancelled by the YS Jagan Mohan Reddy within a week. Last week, the government had asked NECL, which is also the lead promoter of the port project, to exit from Polavaram irrigation project.