Vizag Port Authority Signs Rs. 29,662 Cr. MoU for Durgarajapatnam Complex
Visakhapatnam Port Authority (VPA) has signed a Memorandum of Understanding (MoU) with Andhra government valued at Rs. 29,662 crore at the Indian Maritime Week (IMW) 2025 held recently in Mumbai. This MoU pertains to the development of a port-cum-shipbuilding and repair cluster at Durgarajapatnam.
MoU for Durgarajapatnam Port Project
MoU signed between VPA and the Andhra government aims to boost shipbuilding and ship repair capacity in Andhra Pradesh by developing India’s first mega-shipbuilding cluster at Durgarajapatnam.
For the development of this port, the Andhra Pradesh Industrial Infrastructure Corporation (APIIC) will be allotting 2,000 acre, out of which 1,000 acre will be for shipbuilding operations, whereas the remaining 1,000 acre will be port area. The port area will comprise four dry docks, outfitting jetties, and ship-lift facility. Further, associated industries such as those for fabrication, Steel, Research and Development (R&D) will also be developed as a part of this project. At the time of its conception in 2013, the port was envisaged to have a 25 Million Tonne Per Annum (MTPA)handling capacity, but this figure has changed since then. However, this port’s estimated capacity has not been clarified officially. However, some media reports estimate Durgarajapatnam port’s cargo handling capacity to be around 60-70 MTPA once fully commissioned.
As per recent media reports, South Korea-based HD Korean Shipbuilders have held discussions with state government officials and VPA in regard to the project’s technical framework at the Indian Maritime Week 2025.
SPV Yet to be Formed for Durgarajapatnam Port
Special Purpose Vehicle (SPV) which is to undertake development of Durgarajapatnam port is to be established by a collaboration of VPA, the Andhra State Government, the Central Government of India, and private global entities. As of now, no private equity partners in this SPV have been finalised.
Purpose of this SPV will be to execute the project and also collaborate with global private shipbuilding firms. It will also act as the nodal agent helping to bridge the gap between multiple government agencies and private investment.
As a part of the executing SPV, Andhra Pradesh government will develop land-side infrastructure such as approach roads, utilities, and civil works and provide land as equity. VPA will focus on seaside infrastructure, i.e., berth construction, dredging, and allied maritime facilities. Private global players will be responsible for shipbuilding, ship repair, and ancillary units within the cluster.
Additionally, Central Government will invest Rs. 3,500 crore in developing the seaport component of the cluster.
Brief Background of Durgarajapatnam Port Project
Durgarajapatnam port project has been a longstanding vision put forth by the Government of India in 2013. The original site location in this vision had to face multiple hurdles. According to the Techno-Economic Feasibility Report (TEFR) by consultant AECOM and the following examination by NITI Ayog in 2018, the originally selected site was concluded to be commercially unviable. The original Durgarajapatnam port site fell within the Pulicat Lake Bird Sanctuary buffer zone; this raised serious environmental concerns. Additionally, the site was in close proximity to Satish Dhawan Space Centre (SDSC), hence garnering objections from the Indian Space Research Organization (ISRO). These hurdles led to site relocation, shifting it 20 km away to Tupilipalem village (Vagarru).
