A Strategic Move for Expansion of Operational Footprint
In a significant development that could reshape the maritime landscape of Andhra Pradesh, the Visakhapatnam Port Authority (VPA) has proposed acquiring a 49% equity stake in the upcoming Mulapeta Port (formerly known as Bhavanapadu Port) in Srikakulam district. This move is part of VPA’s broader strategy to expand its operational footprint and strengthen its position among India’s top five major ports.
A Bold Expansion Strategy
The Mulapeta Port project, situated along the 193-km coastline of Srikakulam district, is a greenfield venture with an initial investment of ₹4,362 crore. The port is designed to handle 23.53 million tonnes of cargo annually, making it a crucial hub for maritime trade in the region. VPA’s proposal to buy a 49% stake underscores its ambition to leverage this opportunity for business expansion, especially in a region that borders Odisha and has strategic importance due to its proximity to key industrial and mining zones.
A senior VPA official, speaking on condition of anonymity, confirmed that the proposal has been communicated to the Andhra Pradesh Maritime Board (APMB). “We have expressed our interest in forming a joint venture for the Mulapeta Port. However, we are still awaiting a response from the APMB,” the official said.
Potential Roadblocks
Despite VPA’s enthusiasm, sources within the Andhra Pradesh government suggest that the proposal may face hurdles. The state has reportedly achieved financial closure for the project, and construction work is already underway. With the project moving forward, the state government may be hesitant to alter its current plans. However, there is speculation that VPA could still play a role in the port’s operations and maintenance, given its expertise in handling large-scale port operations. If terms are mutually agreeable, VPA’s involvement could add significant value to the project.
Historical Context and Strategic Importance
Visakhapatnam Port Authority, which handled over 80 million tonnes of cargo last fiscal year and aims to reach 90 million tonnes this year, has a history of pursuing strategic partnerships. Notably, before the construction of Gangavaram Port by the DVS Raju-led consortium, VPA had attempted to collaborate with Rashtriya Ispat Nigam Limited (RINL) for a joint venture. Although that venture did not materialize, it highlights VPA’s long-standing interest in expanding its operations through strategic alliances.
Moreover, VPA has explored constructing a satellite port at Mulakedu near Bheemunipatnam, where it owns a significant parcel of land, including waterfront areas. These past initiatives reflect VPA’s strategic vision to expand its influence and enhance its cargo-handling capacity.
The Mulapeta Port, launched under a landlord model in April 2023, aims to operationalize its first phase with four berths by October 2025. However, due to unforeseen delays, the deadline has been extended to April 2026. The port is expected to play a pivotal role in the economic development of Srikakulam district, providing a vital gateway for trade and commerce.
The Broader Maritime Vision
This proposal comes at a time when India’s maritime sector is undergoing rapid transformation, driven by the government’s ‘Blue Economy’ strategy. Andhra Pradesh, with its 974-km coastline—the second-longest in India—plays a crucial role in this vision. Ports like Mulapeta are not just local assets; they are integral to India’s ambitions of becoming a global maritime leader. As supply chains diversify and trade volumes increase, the need for efficient and well-connected ports has never been greater.
Visakhapatnam Port Authority’s interest in Mulapeta is a strategic move that aligns with the broader national goals of enhancing port infrastructure, increasing cargo-handling capacities, and fostering regional economic development. If the proposal is accepted, it could set a precedent for future public-private collaborations in the Indian maritime sector.
As the state government deliberates on VPA’s proposal, the outcome could have far-reaching implications for both the port’s future and the economic trajectory of the region. For now, all eyes are on Andhra Pradesh as it navigates this crucial decision.