The Visakhapatnam Port Authority (VPA) has proposed taking a substantial equity stake in the Special Purpose Vehicle (SPV) developing Mulapeta Port in Andhra Pradesh’s Srikakulam district. The proposal could establish a joint venture between the Central government-owned port authority and the Andhra Pradesh Maritime Board to strengthen regional maritime infrastructure.

According to reports published in October 2026, VPA has proposed acquiring approximately 49%–50% equity in the port development company. The authority has also sought the allocation of two berths during Phase 1 and another two during Phase 2, subject to the final terms agreed upon by the State and Central governments.

Salt Land Allocation Holds Key to the Proposal

The proposed partnership is closely linked to the allocation and valuation of approximately 3,000 acres of salt land required for the port and its supporting infrastructure.

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. The Andhra Pradesh government has renewed its request for the land to support the wider development of Mulapeta, including port facilities and a proposed Special Economic Zone.

One option under consideration is to transfer the land held by VPA to the port development company and account for its value towards the authority’s equity contribution. However, the State government has raised concerns about this arrangement because the land was originally allotted at a nominal rate.

The proposed investment amount, land valuation and final ownership structure have not yet been settled. A Group of Ministers comprising Finance Minister Payyavula Keshav, Investments and Infrastructure Minister B.C. Janardhan Reddy, and Tourism Minister Kandula Durgesh is expected to examine the proposal and help determine mutually acceptable terms.

Mulapeta Port: Investment and Capacity

Mulapeta is being developed as a greenfield multipurpose port in Srikakulam district. The first phase is estimated to cost ₹3,670 crore and is designed to handle approximately 23.5 million tonnes of cargo annually.

The initial development plan includes four berths—three for general cargo and one for coal. Construction was expected to be completed by May 2027, according to the reported project timeline. The State government must also finalise the framework for operating the port after construction.

Potential Benefits for Visakhapatnam

One of the main objectives behind VPA’s interest in Mulapeta is to shift a substantial share of dust-generating bulk cargo, including coal and iron ore, away from Visakhapatnam Port.

Moving some of these operations could help reduce dust pollution within the city, ease congestion at the existing port and improve vessel turnaround times. It could also help lower demurrage costs for shipping companies when vessels spend less time waiting for berths or cargo operations.

The proposed arrangement could give VPA access to additional cargo-handling capacity while supporting industrial and logistics development around Mulapeta.

However, these benefits will depend on the finalisation of the joint venture, land arrangements, berth allocation and operational plans. Until the State and Central governments reach an agreement, the proposed equity partnership remains under consideration.

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