Jagan Mohan scraps Machilipatnam sea port contract cleared by father 11 years ago

The YSR Congress party government in Andhra Pradesh headed by chief minister YS Jagan Mohan Reddy has terminated yet another contract, this time of the construction of the Rs 18,000 crore Machilipatnam sea port in Krishna district, citing that the project is yet to take off even after 11 years.

An order to this effect was issued late on Thursday night. The decision comes close on the heels of the termination of the contract for the construction of the Polavaram irrigation project on Godavari in the last week of July.

Incidentally, the contractor for the both the projects is Hyderabad-based Navayuga Engineering Company Private Limited.

According to the latest order, the Jagan government also proposed to take back 412.57 acres of land given on lease to the Machilipatnam Port Private Limited (MPPL), of which Navayuga is the lead partner. It also reserved the right to recover “damages” from the company for not fulfilling the contractual obligations.

An official familiar with the development said the government is planning to go in for fresh tenders for the Machilipatnam port project as was proposed in the case of the Polavaram project.

The project was originally conceived during the regime of former chief minister Y S Rajasekhar Reddy in April 2008. A consortium led by Maytas Infra, a sister concern of the Satyam Group promoted by B Ramalinga Raju, bagged the contract for the port project. It was originally called Vajra Sea Port Ltd, but was later renamed as Machilipatnam Port Private Limited (MPPL).

The MPPL, which was supposed to achieve financial closure within 12 months, could not do so following exposure of the Satyam scam and some of the consortium partners backing out.

Subsequently, Navayuga entered the scene in 2010 and had signed a fresh agreement with the then Congress government. However, work for the project did not commence though the government had allocated 412.57 acres of land to the MPPL.

The financial closure for the project was extended several times, as the consortium put forth several conditions, the government order pointed out.

“Though the government approved the detailed project report of the consortium and extended more concessions, the consortium did not begin the project work. Hence, there is no option but to terminate the contract,” the order said.

While Navayuga refused to make any comment on the latest development, former Telugu Desam Party MLA from Machilipatnam Kollu Ravindra strongly condemned the termination of the contract of the Machilipatnam port. “There are suspicions that the Jagan government is planning to hand over the port to certain leaders from Telangana. He should clarify the position and take steps for the immediate commencement of the work,” he said.

Meanwhile, the chief minister, who addressed a meeting of diplomats from 30 countries in Vijayawada on Friday, said his government was trying to create a pro-industry environment. He strongly defended his recent decisions to review the power purchase agreements and reserve 75% jobs for locals in the private sector industries.

He also appealed to the delegates to explore investment options in seaports, airports, oil refineries, steel, water management, interlinking of rivers, clean fuels, research oriented educational institutions, metro rails in Vizag and Vijayawada and innovative welfare schemes.

First Published: Aug 09, 2019 19:47 IST