The report of the Comptroller and Auditor General (CAG) of India on the public private partnership (PPP) port projects implemented by the Andhra Pradesh government was tabled in the State Legislative Assembly recently.
The report identified some key faults on the part of the state government in designing the contracts.
According to the report, the contracts enabled private developers of these port projects to secure huge loans for the project by mortgaging the land given by the state government and this leaves little risk or exposure on the part of the private parties.
A key aspect of the development of ports on PPP mode has been the allotment of large amounts of land to these ports, the report said.
Multiplicity of non-major ports along the coastline, along with liberal grant of exclusive rights over large lengths of coast (well beyond port limits) has virtually rendered the majority of the state’s coastline privatised, the report said.
Notwithstanding the provisions of the concession agreements, the state government irregularly permitted or allowed change in the shareholding pattern of the development consortium and/or port operator in Krishnapatnam, Gangavaram and Machilipatnam ports.
These changes vitiate the sanctity of the bidding and contracting process, it observed.