The Expert Appraisal Committee (EAC) in the Ministry of Environment, Forest and Climate Change has recommended environmental clearance to Adani Ports and Special Economic Zone Ltd (APSEZ) for constructing the second and third phase of the Vizhinjam container transhipment port with an investment of Rs 9,540 crore.
The EAC recommendation will have to be signed off by the Ministry of Environment, Forest and Climate Change.
The port master plan development involves extending the quay (berth) length of the existing container berth by 1,200 metres to 2,000 metres, building container storage yard and related infrastructure behind the 1,200 metres extension berth (within port limits), extending the main breakwater by 900 metres, constructing 1,220 metres of multipurpose berth and 250 metres of liquid berth (along the breakwater), development of liquid cargo storage facility (product will be stored in tanks within port area), reclamation of 77.17 hectares of land and dredging of about 7.20 million cubic metres.
The construction of phases 2 and 3 will expand Vizhinjam port's container handling capacity by 3.87 million twenty-foot equivalent units (TEU's) to 4.87 million TEUs, taking the port's total cargo handling capacity, including multipurpose and liquid cargo, to 94.6 million tonnes (mt) from the existing 11.61 mt.
After a comprehensive analysis encompassing factors such as taxes, employment, transshipment, and marine sector exports, it is evident that the development of phases 2 and 3 of the Vizhinjam port will yield substantial economic benefits for India, the EAC wrote in the minutes of the 16 January meeting to consider the environmental clearance.
"The project is expected to generate significant revenue for both the Central and state governments through GST and create an estimated 3,652 jobs. The collaborative effort between the Government of Kerala and Adani Vizhinjam Port Pvt Ltd (AVPPL) will make a positive contribution in the economies of Kerala and India. Favourably in terms of transshipment, with the capability to accommodate mother vessels directly, India's traders will gain a competitive advantage in terms of logistics costs," the EAC said.
For the Vizhinjam port upgradation, the economic internal rate of return (IRR) a key metric that captures the project's economic viability by considering both its financial and broader socioeconomic benefits works out to 26.754%.
"The development of the proposed Vizhinjam port offers an efficient and cost-effective supply chain/value proposition to the local importers and exporters. This could trigger a new set of opportunities as induced developments. This will accomplish one of the main aims of the proposed port project to bring significant socio-economic benefits to the local people and also to the region as a whole," according to the EAC.
Last year, Adani Vizhinjam Port Pvt Ltd, a unit of Adani Ports and Special Economic Zone Ltd (APSEZ), signed a supplementary concession agreement with the Kerala government to fast track the container transhipment port's timeline with the second and final phase now targeted for completion 17 years ahead of the original schedule or by 2028.
The project period has been extended by five years till 2060 to factor in the challenges faced in its construction such as the pandemic and natural disasters.
Source: ET Infra. Com
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