The Andhra Pradesh government on Wednesday, 15 July defended its decision to operate and maintain Ramayapatnam Port under the Public-Private Partnership (PPP) model, asserting that a transparent bidding process has been launched to attract international players. The move comes amid sharp criticism from the YSR Congress Party (YSRCP), which has opposed handing over port operations to private entities.

Government's Case for PPP

In an official release, the state government argued that the PPP model is neither new nor unique to Andhra Pradesh. Of the 119 non-major ports in India that are either operational or under development, 108 — nearly 91 per cent — are being developed and operated under the PPP framework. States including Karnataka, Odisha, and Puducherry operate all their non-major ports under this model, while Gujarat runs nearly 90 per cent of its non-major ports through PPP arrangements. The government noted that even the Centre follows the same approach for ports under the Ministry of Ports, Shipping, and Waterways.

Key Project Details

Ramayapatnam Port is being developed by the Andhra Pradesh Maritime Board (APMB) in Prakasam district on a design, build, finance, operate, and transfer (DBFOT) basis. The port will span 2,538.42 acres and feature 19 berths at full build-out across four phases (A–D), including one captive BPCL liquid berth. The master plan targets a capacity of 138.54 million tonnes per annum with a basin depth of 20.2 metres CD.

Phase A — sanctioned at ₹4,929.39 crore — has achieved 80.50 per cent physical completion and 73.95 per cent financial progress. It is designed to handle ships of 80,000 deadweight tonnage (DWT) and carry 34.04 million tonnes per annum. The APMB will retain a 12 per cent non-dilutable equity stake across all phases.

Financial Structure and Bidding Terms

The concession period is set at 30 years, extendable by an additional 20 years at the concessionaire's request. The selected operator must pay an upfront premium of ₹1,500 crore in two tranches — 50 per cent at fulfilment of conditions precedent and the remaining 50 per cent at the commercial operation date (COD).

Revenue share will serve as the key bid parameter. Starting from the 20th year of COD, the revenue share payable to the authority will increase by 1 per cent every three years, capped at 25 per cent. A Minimum Guaranteed Revenue (MGR) mechanism kicks in if revenue share falls below specified thresholds — starting at ₹10 crore annually and scaling up to ₹150 crore over time. The land lease fee is set at ₹1 per acre per year.

Operational Obligations on the Concessionaire

The winning bidder must operationalise at least one fully mechanised container berth under Phase A, either with participation from a top global container operator or through a binding MoU with global shipping lines within five years of COD or Phase B1 trigger. The port is designed as a multi-cargo facility handling bulk, container, liquid, and gas cargo.

Construction Progress Across Ports

The coalition government also highlighted broader infrastructure momentum, stating it has achieved 80.50 per cent physical progress at Ramayapatnam Port, 58.91 per cent at Machilipatnam Port, and 76.02 per cent at Mulapeta Port. All three ports are targeted for completion by December 2026.

With the bidding process now underway, the government's next test will be whether it can attract credible international port operators — and whether the revenue-sharing terms prove competitive enough to draw top-tier global interest.