The Visakhapatnam port (India) awarded on Friday January 10th the extension of the existing Container terminal at Visakhapatnam Port  project to Visakha Container Terminal Private Limited (VCTPL).

The final award for the project has been delayed due to the low gross revenue share quoted by VCTPL. However, after the negotiations on December 26, VCTPL has agreed to enhance the revenue sharing from 10.044 per cent to 11.044 per cent.

Visakha Container Terminal is 74% owned by Mumbai-based logistics firm United Liner Agencies of India (Pvt) Ltd and 26 % owned by Dubai's DP World Ltd. The current terminal can manage 400,000 containers a year.

VCTPL developed the existing terminal on June 26, 2003 following a 30-year concession agreement.

The project cost is estimated at Rs 8,200 million (US$133.8 million) and has been reduced from the initial Rs 6,331.1 crore (US$103.3 million). It is a design, build, finance, operate and transfer (DBFOT) public private partnership (PPP) project. The project will add 0.54 million TEUs (twenty-foot equivalent units) to the existing capacity of 0.40 million TEUs.

The project works include construction of a berth, erection of higher capacity cranes, handling equipment and reclamation of more than 100 acres, and is expected to be completed in the next three to four years. The port is expected to handle more than 270,000 containers this fiscal, up from 80,000 containers it handled in 2008-09.

Industry sources said that the lack of interest among bidders can be attributed to the fourth container terminal coming up at Jawaharlal Nehru Port Trust (JNPT) in Navi Mumbai with a cargo capacity of 2.4 million TEUs. JNPT project is located in Mumbai, which is already an established container hub generating a huge business while Vizag is still growing. According to sources, banks would be more willing to support projects there.