Kakinada Gateway Port Ltd. Signs Concession Agreement for development of Commercial Port;Heralds a new era of Industrialization in the Kakinada SEZ Region

Deepthi | Myequity news | Date : 21-11-2018 18:30:00 IST

Kakinada Gateway Port Limited (KGPL), a subsidiary of Kakinada SEZ Limited (KSEZ), has signed the Concession Agreement with the GoAP for development of a green-field commercial port on Design, Build, Finance, Operate and Transfer (DBFOT) basis in Kona Village, East Godavari District, Andhra Pradesh.

The Agreement was signed in the presence of Hon’ble Chief Minister of Andhra Pradesh, Mr. Chandrababu Naidu, Mr. Ajay Jain, Principal Secretary (IAS), Energy, Infrastructure & Investment Department, GoAP, Mr. Koya Pravin (IPS), Directorate of Ports, GoAP, Mr. Prasanna Challa, CEO – Kakinada SEZ, Mr. Nagarjuna Tadury, Vice President – Ports, Kakinada SEZ.

The concession has been awarded with a concession fee of 2.7% of revenue share in the first 30 years of COD, 5.4% of revenue share in the years 31 to 40 and 10.8% revenue share in the years 41 to 50. The Port would be developed in an area of approx. 1811 acres owned by KSEZ.

Kakinada SEZ Limited had received the letter of award on 5th Oct, 2018 for development of Greenfield commercial port at Kona Village, Thondangi Mandal, East Godavari District, A.P. KSEZ has promoted KGPL as its wholly owned subsidiary and as the Special Purpose Vehicle for implementation of the Port Project.

This event heralds a new era of industrialization for the Kakinada Region. Kakinada SEZ, a port based industrial Park, is on the verge of manifesting industrial vibrancy with lot of enquiries and site visits by Potential industrial and immediate employment generation from food processing companies. In the medium term of 1 to 3 years, the Port is expected to generate an employment of ~3000 people and investment of Rs. 2123 Cr.

The Kakinada SEZ industrial park, is strategically located on the Vizag-Chennai Industrial Corridor in the East Godavari District of Andhra Pradesh, and offers approximately 8521 acres of industrial land and Greenfield commercial port spread in 1811 acres. Given the advantages of abundant water, surplus power, assured gas supply by Andhra Pradesh Gas Distribution Corporation (APGDC) and the assurance of GMR of a developed industrial park with a commercial port in proximity, companies are making a beeline to establish their manufacturing units in Kakinada SEZ. Kakinada SEZ would be the first Industrial Park on Eastern Coast of India that can provide piped Natural Gas supply to all its industrial units.

The SEZ is already operational with a leading Global Toy manufacturer Pals Plush, employing over 700 women from the nearby villages and which will be scaled up to ~2000 people in due course. M/s. Conneqt Business Solutions (earlier M/s TATA Business Support Solutions (A TATA Group Company)) has established its rural BPO and running successfully, presently employing over 75 people from the surrounding villages and will employ 350 people in due course.

Sea Food processing industries are under implementation at Kakinada SEZ and have started factory construction activities. With these units, employment would be provided to approx. 3000 people in the near term of less than 1 year. The company is also in advance discussions with Standard Group of Bangladesh to set up Denim jeans manufacturing facility, which would employ around approx. 3500 people.

HPCL-GAIL consortium entered into an MoU with GoAP to set up an Ethane Petrochemical Cracker complex in Kakinada SEZ, with an investment of Rs. 35,000 Cr. Kakinada SEZ is also in discussions with other Refinery / Petrochemical companies for setting up of Refinery. The Refinery / Petrochemical projects would also provide a fillip to Port, with significant liquid cargo traffic to the Port.

With the Port, Refinery and Petrochemical Complex, lot of downstream chemical companies have already shown interest to set up industries. Kakinada SEZ has already entered into MoUs with DCM Shriram, Deepak Phenolics, Chemplast Sanmar, Petropath Fluids, Oil Field Warehousing Services, etc.

The company is also in discussions with various international companies from countries like Korea, Taiwan and China in sectors like Chemicals, Petrochemicals, Food processing, Solar Equipment Manufacturing, Toys & Textiles and Glass & Ceramics manufacturing.

With signing of up gas agreement with APGDC, the company has seen visits from international Solar Panel manufacturers (driven by Govt. thrust for indigenous integrated manufacturing), Ceramics & Glass manufacturers. A company internal estimate of the potential employment in the next 5 to 10 years stands at 30,000 to 40,000 people.

About GMR Infrastructure Limited (GIL):

GMR Group, a leading global infrastructure conglomerate with interests in Airport, Energy, Transportation and Urban Infrastructure, is listed on Indian Stock Exchanges.

More from Myequity