Hyderabad-based Navayuga Engineering Co Ltd, the majority partner in the consortium that was awarded the engineering, procurement and construction (EPC) contract for building a new port at Ramayapatnam in the state’s Prakasam district, will take over the 49 % stake held by Aurobindo Realty and Infrastructure Pvt Ltd in the joint venture and make it a 100% owned entity, multiple sources said.
The move comes a few months after N Chandrababu Naidu returned to power in Andhra Pradesh, defeating his rival Y S Jagan Mohan Reddy in the elections held in May. Aurobindo Realty and Infrastructure Pvt Ltd, the real estate and infrastructure venture formed by the promoters of Mumbai-listed and Hyderabad-based Aurobindo Pharma Ltd, is considered close to Jagan Mohan Reddy.
“The stake purchase/sale is in the process,” said a person with knowledge of the development. “It will happen,” he added, without divulging details. Navayuga Engineering Co Ltd declined to comment.
The EPC contract for the Ramayapatnam port was awarded to a consortium led by Navayuga Engineering Co Ltd for Rs 26.34 billion. Since Aurobindo Realty and Infrastructure lacked the technical expertise to participate in the tender, it roped in Navayuga Engineering as a 51 % shareholder in the joint venture to benefit from the latter’s experience in port construction such as Krishnapatnam port. The consortium qualified for the tender only on the strength of the technical expertise of Navayuga Engineering.
“The Aurobindo Group had a great equation with the previous Jagan Mohan Reddy government. Now, the table has turned with Chandrababu Naidu assuming power in Andhra Pradesh,” the person said.
“Navayuga Engineering, which was in port construction and operation earlier, is the main contractor for the EPC work for Ramayapatnam port. It is seeking to get back into that business now that the political situation is in its favour,” the person mentioned earlier said, asking not to be named, as the discussions are private. Ramayapatnam port is being developed by the Andhra Pradesh Maritime Board on a landlord model in two phases with the first phase costing Rs3,736 crore to handle 24.91 million tonnes (mt) of cargo a year from four berths. In the second phase, the port’s cargo handling capacity will be expanded by 113.63 mt with an investment of Rs6,904 crore, to take the total capacity to 138.54 mt a year from 19 berths.
Ramayapatnam is one of the four new ports identified by the Andhra Pradesh government to expand the port capacity to 400 million tonnes (mt) a year from 110 mt a year. A joint venture-led by Hyderabad-based Vishwa Samudra Holdings Pvt Ltd is executing a Rs29.49 billion engineering, procurement and construction (EPC) contract for a new port at Mulapeta (earlier located at Bhavanapadu) in Srikakulam district.
Visakhapatnam-based R R Constructions Pvt Ltd is a junior partner in the joint venture formed to undertake the EPC contract for Mulapeta port.
