India is set to add a major port to its kitty of 12 existing ones as the Union Cabinet on Wednesday approved setting up one such port at Vadhavan in Gujarat at a total cost of Rs 65,544.54 crore.
The Vadhavan port will be developed on “landlord’ model. A special purpose vehicle (SPV) will be formed with Jawaharlal Nehru Port Trust (JNPT) as the lead partner with 50 per cent or more equity to implement the project.
Under the landlord port model, the port authority typically leases infrastructure to private operating firms or to user industries such as refineries, and oil and gas terminals. Such ports have a hybrid character and strive to achieve a balance between public (port authority) and private (port industry) interests.
The SPV will develop the port infrastructure including reclamation, construction of breakwater, besides establishing connectivity to the hinterland.
All the business activities would be undertaken under PPP mode by private developers.
Currently, India has 12 major ports at Deendayal (erstwhile Kandla), Mumbai, JNPT, Mormugao, New Mangalore, Cochin, Chennai, Kamarajar (earlier Ennore), V O Chidambaranar, Visakhapatnam, Paradip and Kolkata (including Haldia).
“Setting up a major port is a big task and takes time but I am hopeful that we should be able to start work on the project soon,” Shipping Minister Mansukh Mandaviya told reporters when asked about the timeline for the new port.
The reason behind setting up another major port on the country’s west coast is the exhaustion of container cargo capacity of the Jawaharlal Nehru Port which is 10 million TEUs (twenty foot equivalent). On the west coast this capacity is 18 million TEUs, while the total requirement will increase to 25 million TEUs in 2030.
With the development of Vadhavan port, India will break into the countries with top 10 container ports in the world, Mandaviya said.
Maharashtra has India’s largest container port at JNPT which caters to the hinterland of Maharashtra, North Karnataka, Telangana and secondary hinterland of Gujarat, Madhya Pradesh, Rajasthan, NCR, Punjab and Uttar Pradesh.
The central government felt that there was need for a deep draft port to accommodate the largest Container Ships in the world and also cater to the spill over traffic from JNPT port once its planned capacity of 10 million TEUs is fully utilized.
The Vadhavan port has a natural draft of about 20 meters close to the shore, making it possible for it to handle bigger vessels at the port. Development of Vadhavan port will enable call of container vessels of 16,000-25,000 TEUs capacity, giving advantages of economies of scale and reducing logistics cost.
The demand for container traffic will further accelerate after the plans for improving logistic infrastructure fructify and the ‘Make in India’ push drives greater exports and manufacture sourcing to India, an official statement said.
WHAT THE PORT COULD BRING
- Boost for port-led development
- Reduction in logistics cost
- Development of tribal areas
- Cargo from – South Gujarat, Indore (Madhya Pradesh), Maharashtra, Telangana, North Karnataka and land locked states of north India