Adani Ports gets govt approval for INR 12,256-cr, Phase 3 expansion of Krishnapatnam Port


The Adani Group-owned Krishnapatnam Port Co Ltd (KPCL) has received the support of a key government agency that is responsible for recommending environmental and coastal regulation zone (CRZ) clearance for the third and final phase expansion of the port, with an investment of INR 12,256 crore.

During a meeting held on December 14, the expert appraisal committee (EAC) connected to the Ministry of Environment, Forest and Climate Change recommended environmental and CRZ clearance to the third phase expansion.

With a depth of 18.5 metres, the port, located in Nellore district of Andhra Pradesh, currently has the capacity to handle 64 million tonnes (mt) of cargo and 2 million twenty-foot equivalent units (TEUs) of containers.

Adani Ports and Special Economic Zone Limited (APSEZ) completed the acquisition of a 75 per cent stake in Krishnapatnam Port Company from the CVR Group for an enterprise value of INR 12,000 crore back in October 5.

APSEZ intends to convert Krishnapatnam, which is India’s second largest private port, into a “Mundra” on the eastern coast in the run-up to the target of building 500 mt of cargo handling capacity by 2025.

Located in Gujarat, Mundra is the India’s biggest commercial port and the flagship port of APSEZ.

The third-phase development of Krishnapatnam port includes constructing twenty berths and three Single Buoy Moorings (SBMs) to build capacity for handling an additional 154 million tonnes (mt) of dry and liquid bulk cargo plus 2.2 million TEUs of containers.

After the completion of the third phase, the port will have an overall capacity to handle 250 mt of non-container cargo and 5.5 million TEUs of containers. With enough land available, APSEZ said the capacity of Krishnapatnam can be increased further.

Show cause notice issued to Consultant

During the meeting, the EAC pulled up environment impact assessment (EIA) consultant Cholamandalam MS Risk Services Limited over what it termed as a “serious lapse”.

The validity of the environment and CRZ clearance (EC) order for the Phase 2 development of the port expired on November 12, 2019.

According to EAC, KPCL is yet to finish the project activities approved vide EC order for the Phase 2 development. However, in the EIA report it was mentioned that Krishnapatnam port has completed Phase 1 and 2 developments.

The EAC also took cognisance of how the project involves diversion of 418 hectares of forest land for development of Phase 3, though in the application it was mentioned that no forest land is involved, which it considered as a “serious lapse on the part of consultant”, as the incorrect statement provided in the EIA report “may create confusion and leads to violation of EIA Notification 2006”.

“After apology made by the EIA consultant, a warning letter was sent to the concerned EIA consulting agency stating that in case of further inadequacy in addressing the factual information in future projects, legal action will be initiated,” according to the December 14 EAC meeting .

Due to this, a show cause notice was issued to the Chennai-based EIA consultant Cholamandalam MS Risk Services Limited.

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