Andhra Pradesh Govt. Okays Plan To Build Port, Mega Shipbuilding Cluster at Dugarajapatnam
Chennai:
Port Wings News Network:
The Andhra Pradesh government has approved a plan to build a green field port and mega shipbuilding cluster at Dugarajapatnam in the state’s Tirupati district through a 50:50 special purpose vehicle between AP Maritime Board and Centre-owned Visakhapatnam Port Authority (VPA) under the Ship Building Development Scheme (SbDS) approved by the Union Cabinet, says a report published on leading business daily The Economic Times.
According to ET Infra report, the N Chandrababu Naidu-led state government has also accorded permission to AP Maritime Board to acquire 2,000 acres of land for the mega shipbuilding cluster by mobilising resources and to transfer the land to the SPV as equity of the state government, per a 2 January 2026 order issued by the Infrastructure & Investment (Ports) Department of Andhra Pradesh.
The state government further authorised AP Maritime Board to initiate action on picking a shipyard partner to develop the mega greenfield shipbuilding cluster within the contours of the Ship Building Development Scheme under the SPV framework.
MEGA GREENFIELD SHIPBUILDING CLUSTER
Andhra Pradesh has, thus, become the first state to approve a mega greenfield shipbuilding cluster, a week after the Ministry of Ports, Shipping and Waterways issued guidelines in this regard on 26 December 2025.
A greenfield shipbuilding cluster – a location developed as plug-and-play infrastructure to host a comprehensive shipbuilding and repair ecosystem – will have a waterfront of some 2 km and landside area of about 2,000 acres. It must have about 1,000 acres of land for shipyard(s) and around 1,000 acres for ancillary industries, internal and social infrastructure and common facilities to be eligible for capital grant from the Centre.
Each cluster will comprise one or more large shipyard(s) with a total cluster capacity of about 1.2 million Gross Tonnage (GT) per annum. At least one of the anchor shipyard(s) should have a design capacity of at least 0.5 million GT per annum, which is to be achieved within 10 years from the date of commissioning of the facility.
With Dugarajapatnam finalised as the location for hosting the greenfield shipbuilding cluster, the SPV to be formed can apply for in-principle approval of the National Shipbuilding Mission (NSbM) through the implementing agency (IA) – the Directorate General of Shipping (DGS).
The inter-ministerial governing board of the National Shipbuilding Mission will then review the proposal from the SPV, take the views of an Independent Evaluation Agency (IEA) and IA and decide on granting final approval for the greenfield shipbuilding cluster.
The Shipbuilding Development Scheme will provide 100 per cent capital assistance (grant) of the cost of eligible components for approved greenfield shipbuilding clusters. These include breakwaters, tide independent basins, wave breakers, channel and basin development, land reclamation, area grading, regional shipbuilding capability development centres, common maritime assets (barges, floating cranes), internal infrastructure, utilities, land development, etc.
The SPV will be responsible for planning, financing, and developing the greenfield shipbuilding cluster infrastructure under the scheme.
The land parcel earmarked for the greenfield shipbuilding cluster will be transferred to the SPV by the state government at ₹1. In cases where government land is not available, it may be acquired by the state government at its own cost, according to the guidelines issued by the Ministry of Ports, Shipping and Waterways.
The ministry’s guidelines stipulate that capital assistance to greenfield shipbuilding clusters will be disbursed only when at least 90 per cent of the land has been acquired with a long-term lease or title transfer, all major statutory approvals (including environmental clearance, CRZ permissions, any port/shoreline approvals) required for core works have been secured and a firm investment commitment from anchor shipyard(s), in the form of a binding MoU have been obtained.
Land and common maritime infrastructure developed under the scheme will be leased by the SPV to participating shipyard developers on a lease tenure of sixty years for main yard parcels. The lease period may be further extended based on mutual consent of the SPV and the shipyard(s).
The selected anchor shipyard(s) will invest in yard-specific infrastructure, equipment, and operations on a commercial basis and pay an agreed annual lease or concession fee to the SPV. The cost of setting up individual facilities of the respective anchor shipyard(s)/other entities will be borne by them, according to the ministry’s guidelines.
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