The Adani Group’s Vizhinjam Port has received the shipping ministry’s approval for operating as India’s first transshipment port. The recommendation for declaring it a customs-notified port was made earlier this week, according to people aware of the details.
Current regulations require the shipping ministry’s nod to prevent competing projects from being permitted before capacity at operational ports is saturated. “This approval paves the way for customs to set up an office at Vizhinjam port. It will be India’s first full-fledged deepwater transshipment port. A final nod from the Central Board of Indirect Taxes and Customs (CBIC) is expected in the coming three months,” a senior government official said on condition of anonymity.
Adani Ports and Special Economic Zone Ltd (APSEZ) started the international transshipment project in Vizhinjam, Kerala in December 2015.
A transshipment port is a kind of transit hub where cargo from one ship is transferred to another ship on the way to its final destination.
The initial goal was to complete the ₹7,700 crore deepwater seaport project in four years by 2019. It is now expected to start operations in this financial year. The project seeks a share in the Indian cargo totalling more than a million containers which are transshipped annually through foreign ports, such as those in Colombo in Sri Lanka.
Container volumes are measured in twenty-foot equivalent units (TEUs). One TEU is roughly equal to a standard size container.
According to APSEZ, the port offers large-scale automation for quick turnaround of vessels with state-of-the-art infrastructure to handle Megamax containerships – the largest currently in operation globally.
Its capacity in the first phase is to be one million TEUs. Another 6.2 million TEUs will be added in subsequent phases. It is estimated that nearly 75% of India’s transshipment cargo is handled at ports outside the country. Ports in Colombo, Singapore and Klang handle about 85% of this cargo.
APSEZ will declare its January-March 2024 financial results on May 2. In 2023-24, the company handled 420 million metric tonnes cargo globally, up 24% year-on-year.