3 firms sign project deal for Machilipatnam port

In a significant development, major corporates Megha, Ramky and Navayuga have signed a tripartite agreement on the Machilipatnam port.

Representatives of the three companies signed the agreement on Friday and decided to pursue the project. Sources in know of the development confirmed to Deccan Chronicle that the agreement was signed and Megha would have a controlling stake while Navayuga would have a 26 per cent share.

The development comes after Chief Minister Y.S. Jagan Mohan Reddy recently directed the infrastructure department to float tenders under the engineering, procurement and construction (EPC) mode for the port which has been in limbo for almost two decades.The YSRC government had cancelled the concession agreement with Navayuga on the Machilipatnam port as the company had failed to take up construction since 2008. Navayuga challenged the government’s decision in the AP High Court, which allowed the state government to float fresh tenders but put a condition that the final award should done subject to the outcome of its verdict.

Following the tripartite agreement, the consortium will have two options, one being that the consortium will propose to the state government to revive the concession agreement with Navayuga and allow the consortium to take up construction at the earliest. The second option would be that Navayuga would withdraw the case, paving way to the government to float the EPC tenders and the consortium would bag the contract.

“Navayuga retaining

26 per cent indicates that the consortium would attempt the first option of reviving the concession agreement, according to which the original concessionaire should hold a minimum stake of

26 per cent during the construction period,” sources pointed out.