Jawaharlal Nehru Port Authority (JNPA) is evaluating a proposal to extend the concession period of India’s first private container terminal—operated by DP World—by four years beyond its current expiry in 2027, as part of a broader strategy to consolidate terminal operations and enhance capacity utilisation.
The terminal, Nhava Sheva International Container Terminal Pvt Ltd (NSICT), currently operates under a 30-year concession agreement set to conclude on June 30, 2027. The proposed extension would align its tenure with that of the adjacent Nhava Sheva (India) Gateway Terminal Pvt Ltd (NSIGT), also run by DP World, whose concession runs until 2031.
Speaking on the development, JNPA Chairman Gaurav Dayal said the port authority is actively examining the proposal. “In principle, we are in favour of an extension, but legal aspects need to be worked out,” he noted, adding that the move would benefit both the port and future operators.
Ministry Pushes Decision Back to Port Authority
The proposal gained momentum after the Ministry of Ports, Shipping and Waterways directed JNPA to take a final call on extending NSICT’s concession. The ministry’s response followed JNPA’s earlier recommendation—approved by its board—to roll over the concession and seek ratification.
According to officials, the ministry clarified that the decision lies between the contracting parties, effectively placing the onus on JNPA to proceed.
One Terminal Vision Driving Extension
The core objective behind the proposed extension is to facilitate the eventual merging of NSICT’s 600-metre berth with NSIGT’s 330-metre facility into a single 930-metre mega terminal. This combined asset is expected to be tendered out in 2031 as a unified concession, potentially attracting higher royalty bids and enabling improved operational efficiency.
“Running two separate terminals does not make sense,” Dayal said, highlighting that a combined facility would allow simultaneous berthing of large vessels, including 400-metre-long ships, which is currently not feasible.
Port officials indicated that in recent weeks alone, several large vessels could not be accommodated due to berth constraints—underscoring the need for integrated infrastructure.
Extension on Existing Terms
JNPA has proposed that the four-year extension be granted on the same terms and conditions as the existing concession agreement. This includes a 6% annual escalation in royalty per twenty-foot equivalent unit (TEU).
Under the current contract, NSICT’s royalty payments have risen steadily—from ₹47 per TEU in 1997-98 to ₹5,610 per container by 2027-28—reflecting the built-in escalation clause.
Officials emphasized that maintaining identical terms is critical to avoid any perception of preferential treatment. “This is not to favour the operator but to serve the port’s long-term interest,” a source said.
DP World’s Consent Key
JNPA has reached out to DP World to secure its consent for the proposed extension. Approval from the operator will be essential to move forward, as any modification to the concession period requires mutual agreement.
“If they agree to the terms, the extension can proceed. Otherwise, it may not work out,” a source familiar with the discussions noted.
Addressing Past Concerns
The move also aligns with longstanding plans to privatise the two berths as a single terminal—an approach previously flagged by auditors, including the Comptroller and Auditor General of India, which had criticised the earlier decision to privatise them separately.
By synchronising concession timelines, JNPA aims to finally implement the “one terminal” model, unlocking higher efficiency, better vessel handling capability, and improved revenue potential.
