Mulapeta set to become mega port as centre pushes development plans

The Union government-run Visakhapatnam Port Authority has expressed interest in investing approximately ₹1,500 crore to help develop a mega port at Mulapeta in Srikakulam district, Andhra Pradesh. The port, currently being constructed by the state government, is envisioned as a catalyst for industrial growth. To support this vision, the Port Authority has requested the transfer of around 2,000 acres of adjacent salt land from the Centre, aiming to establish a Special Economic Zone or a port-based industrial hub.

The Telugu Desam Party (TDP), led by Andhra Pradesh Chief Minister N Chandrababu Naidu, is part of the BJP-led National Democratic Alliance (NDA) government at the Centre, while the BJP shares power in the TDP-led government in the state. During an event at Visakhapatnam Port on July 14, focused on unveiling capacity-building projects, T K Ramachandran, Secretary of the Ministry of Ports, Shipping and Waterways, urged Visakhapatnam MP M Sribharat (TDP) to leverage his influence with Chief Minister Naidu to develop Mulapeta Port along the lines of the Vadhvan mega port in Maharashtra. The Vadhvan Port is currently being developed by the Jawaharlal Nehru Port Authority in collaboration with the Maharashtra Maritime Board.

An investment of around ₹1,500 crore by Visakhapatnam Port Authority in Mulapeta Port will help the state government save some ₹150 crore in annual interest cost on loan taken for building the new port on engineering, procurement and construction (EPC) model. The Mulapeta Port limit is controlled by the Andhra Pradesh Maritime Board.

Visakhapatnam Port Authority is eyeing Mulapeta Port because it is located nearby in the adjacent Srikakulam district. The Phase 1 of the multipurpose port at Mulapeta, costing ₹3,670 crore, will have four berths, three for handling general cargo and one for coal, with a capacity to handle 23.5 million tonnes of cargo a year. Visakhapatnam Port Authority has already prepared a Detailed Project Report (DPR) for Phase 2 of Mulapeta port project.

The port authority is eyeing huge tracts of salt land at Mulapeta owned by the Union government. The salt land is managed by the Salt Commissioner’s Organisation, which is attached to the Department for Promotion of Industry and Internal Trade (DPIIT) in the Ministry of Commerce and Industry.

The Andhra Pradesh Maritime Board is also said to be interested in taking over the salt land at 50 per cent of the guideline value or circle rate of the state. In 2024, the Union government amended guidelines for transfer of unused and unproductive salt lands across the country to Central government departments/Ministries, Central Public Sector Enterprises, state governments and public enterprises of states for public purpose on 99 years lease. The land transfers for ports, industrial purposes, renewable energy projects, and eco-tourism will be priced at 50 per cent of the guideline value or circle rate of the state. However, Central government departments will continue to get the land at a token payment of ₹1.

With the amended guidelines, Visakhapatnam Port Authority being a Union government enterprise, will have easy access to land at ₹1, while the state government will have to take over the land at 50 per cent of the guideline value or circle rate of the state. The AP government will have to pay money for the land, then only the mega port at Mulapeta will take off.

The success of the Mulapeta mega port hinges on securing substantial backup land. However, despite the TDP and BJP jointly holding power both at the Centre and in Andhra Pradesh, the decision to develop the port under the Visakhapatnam Port Authority and transfer 2,000 acres of adjacent salt land has faced delays.

The DPIIT is understood to have told the Ministry of Ports, Shipping and Waterways, Visakhapatnam Port Authority and the Andhra Pradesh Maritime Board to come to a consensus to let only one entity apply for the salt land. At a recent meeting, Chief Minister Naidu is said to have informed MoPSW officials that he will revert on the matter after weighing all the options.

Mulapeta is one of the three ports being constructed by the state government with its own funds to expand capacity. With a rapidly evolving maritime landscape and the vision to develop the AP coastline, it will require the state government to depute experienced officials to lead the maritime board and liaison with DPIIT, Visakhapatnam Port Authority and MoPSW.