With the objections over applicability of the latest lease rental cleared, the work on the expansion of Visakha Container Terminal Private Limited (VCTPL) termed as ‘Terminal-2 Project’ will be launched shortly.
Though the project proponent – J.M. Baxi Group and Dubai Port World—had completed the process for financial closure for the ₹633-crore project under Build, Operate and Transfer (BOT) scheme, uncertainty dogged issuing of the work order for sometime.
Concession agreement
However, after taking legal opinion, the port is understood to have agreed to allow applicability of lease rental in force between 2008-2013. During that period, the concession agreement was finalised. The lease rentals are revised once in five years.
After legal consultation, the differences over applicability of quinquennium (a specified period of five years) have been removed to ground the project without delay. As the container business is also showing signs of improvement over the years, the project proponent, one of the BOT operators of the VPT, is keen that it should not delay the expansion project further.
“We are in the process of issuing the work order by January-end or first week of February. The project will be completed within 24 months,” Visakhapatnam Port Trust Deputy Chairman P.L. Haranadh told The Hindu, adding that the Terminal-2 Project would take the total capacity to 1.2 million twenty-foot equivalent units (TEUs).
During current year, he said the VCTPL was expected to handle 0.45 milion TEUs as against its capacity of 0.5 million TEU.
Improvement in rake position and overcoming of empty rake problem following relaxation of Cabotage law had helped achieving a good growth rate for the VCTPL, he said, adding that once construction of the new terminal was completed, the VCTPL would emerge as one of the largest and deepest container terminals in the country.
Handling capacity
The VCTPL is can handle a large and a small ship. Once expansion project is completed, it will have a larger quay length for simultaneous handling of two super post-Panamax ships each carrying 14,000 to 19,000 TEUs making cargo evacuation and transhipment to ports at Colombo, Singapore Bangkok and Dubai faster.