The Visakhapatnam Port Authority (VPA) has proposed acquiring a 50% stake in the under-construction Mulapeta Port in Andhra Pradesh’s Srikakulam district. The proposal would establish an equal joint venture between the central government-owned VPA and the Andhra Pradesh Maritime Board, strengthening cooperation between the Centre and the state in port development.
However, discussions on finalising the partnership remain ongoing, primarily due to issues concerning approximately 3,000 acres of salt land at the port site. The land is considered important for port operations and supporting infrastructure, while the financial terms of VPA’s proposed investment are still under deliberation.
₹3,670 Crore First-Phase Project
Mulapeta is one of Andhra Pradesh’s greenfield port projects being developed by the state government through the Andhra Pradesh Maritime Board. The first phase of the multipurpose port is estimated to cost ₹3,670 crore and is designed to handle 23.5 million tonnes of cargo annually.
The initial development plan includes four berths, three for general cargo and one for coal. The port is intended to expand cargo-handling capacity along the state’s coastline and support industrial and logistics activity in the surrounding region. Construction was expected to be completed by May 2027, according to the latest report.
Bulk Cargo Diversion from Visakhapatnam
VPA’s interest in Mulapeta is linked to its plans to shift a significant share of dust-generating bulk cargo, including coal and iron ore, away from Visakhapatnam Port. Relocating these operations could help reduce pollution in the city, ease congestion and improve vessel turnaround times at the existing port.
The proposed partnership would also give VPA a role in Mulapeta’s future operations. The authority has reportedly sought berths across the port’s development phases, although the final ownership structure and operating arrangements have yet to be settled.
Salt-Land Issue Holds Up Agreement
The proposed joint venture faces a key question over the allocation and valuation of around 3,000 acres of salt land. The land was allotted to the Union Ministry of Ports, Shipping and Waterways at a nominal rate of ₹1 per acre and subsequently transferred to VPA.
One option under consideration is to transfer the land to the port development company in exchange for equity. However, the Andhra Pradesh government has raised concerns about using land obtained at a nominal price as the basis for valuing VPA’s stake.
The Centre and state are discussing the matter to reach a mutually acceptable arrangement. Until the land issue and investment terms are resolved, the proposed 50:50 joint venture remains under consideration.
If finalised, the partnership could help establish Mulapeta as an additional cargo gateway for Andhra Pradesh while supporting VPA’s strategy to improve operational efficiency and reduce pollution at Visakhapatnam Port.