Visakhapatnam Port Terminates PPP Berth Contract Due to Non-Compliance

State-owned Visakhapatnam Port Authority has terminated the contract with AVR Infra Pvt Ltd, a unit of Chennai-based IMC Ltd, for the Eastern Quay Berth-10 (EQ-10). The termination comes after the company failed to meet the minimum guaranteed throughput (MGT) obligations for six years of the 30-year concession, signed in 2010 for handling liquid cargo. AVR Infra had committed to handling 400,000 tonnes annually but fell short every year since operations began in January 2017. Despite a COVID-related reprieve, the port issued a termination notice, giving AVR Infra until 18 January 2025 to comply. Visakhapatnam Port Authority Chairman, Dr Madhaiyaan Angamuthu, stated that holding the berth without business was detrimental to the company, noting that while IMC Ltd performed well elsewhere, the expected business in Visakhapatnam did not materialise. The private operator cited restrictions on cargo, particularly edible oil and caustic soda, for their inability to meet the MGT requirements. Despite this, industry sources acknowledged that no company would willingly quit such a contract. The termination marks the fourth PPP project to end at Visakhapatnam Port in recent years. However, the EQ-10 berth is debt-free, eliminating the need for the port authority to pay 90% of the debt as termination compensation. The port plans to operate the berth itself, diversifying into bunkering and possibly hiring an O&M contractor. This follows the success of the O&M model at other terminals, which has proven profitable for the port authority.