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Visakhapatnam Port Authority has terminated the concession contract with AVR Infra Pvt Ltd (a unit of Chennai-based IMC Ltd) for the Eastern Quay-10 (EQ-10) berth due to non-compliance with minimum guaranteed throughput (MGT) obligations, a senior official confirmed. The EQ-10 berth, handling liquid cargo such as chemicals and edible oils, was part of a 30-year agreement signed in 2010, but AVR Infra has failed to meet its MGT of 400,000 tons annually for six consecutive years since the terminal began operations in 2017.
The termination follows a notice issued more than three months ago, allowing AVR Infra a 45-day extension, which will conclude on January 18, 2025. Visakhapatnam Port Authority Chairman Dr. Madhaiyaan Angamuthu explained that the company’s failure to meet throughput targets had resulted in minimal revenue share for the port, with the berth handling significantly less cargo than stipulated. AVR Infra attributed its non-compliance to a downturn in demand for key products like edible oil and caustic soda, along with restrictions on cargo handling at the berth.
Despite the termination, the project remains debt-free, as AVR Infra has cleared all dues. The port authority now plans to operate the EQ-10 berth itself, with a focus on diversifying its cargo profile and potentially introducing bunkering services. The port is considering hiring an operation and maintenance (O&M) contractor, following the success of the O&M model in other terminals at Visakhapatnam.
This is the fourth PPP project to be terminated at the port in recent years. Visakhapatnam Port Authority has adopted the O&M model for several terminals, including East Quay 1A and EQ1, which have proven to be profitable. This shift in approach is expected to lead to more successful operations and improved revenue generation for the port. |
