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Public investment Board clears new major port at Vadhavan

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The Public Investment Board has cleared the construction of a new deep water major port at Vadhavan near Dahanu in Maharashtra's Palghar district, estimated to cost some Rs76,220 crores, and recommended the mega project to the Union

Cabinet for a final nod, multiple government sources said.

The Public Investment Board headed by TV Somanathan, Finance and Expenditure Secretary, Finance Ministry, considered and approved the new port project at a meeting on Friday, an official with the Ministry of Ports, Shipping, and Waterways, one of the sources, said asking not to be named.

In a separate development, the Ministry of Environment, Forest and Climate Change granted environmental and coastal regulation zone clearance for the project on Friday based on the recommendations of the Expert Appraisal Committee.

With 15 days of getting the final investment clearance from the Union Cabinet, Jawaharlal Nehru Port Authority (INPA) is expected to float tenders for the engineering, procurement and construction (EPC) contract, port officials said.

The 298 million tonnes (mt) capacity a year port, will be India's 13th major port (owned by the Union Government) and the first major port to be developed in partnership with a state government (Maharashtra).

It will be constructed by Vadhvan Port Project Ltd, a joint venture between Jawaharlal Nehru Port Authority (74 percent stake) and Maharashtra Maritime Board (26 percent equity), in two phases under the landlord model, per the government policy.

In the landlord port model widely followed globally, the publicly governed port authority acts as a regulatory body and as landlord, while private firms carry out port operations, mainly cargo handling activities. The landlord port, in return, gets a share of the revenue from the private entity.

Vadhavan will be the first major port to be built in more than two decades (the last was Kamarajar Port in Tamil Nadu which started operations in February 2001).

The construction of a new port at Vadhavan is key to the expansion plans of JNPA- India's biggest state-owned container gateway and the nation's second largest - given the limitations on expansion at Nhava Sheva (where J N Port is located).

Vadhavan Port will be designed to handle 24.5 million twenty-foot equivalent units (TEUs) a year - a capacity that no other Indian ports have due to natural limitations from 9 container terminals each with a straight 1,000 metres long quay (berth) of which 7 terminals will have container storage yard located directly behind the quay apron while the back-up area for two terminals is located about 1 km behind the quay. The deep-water port will be designed to accommodate container ships

with a capacity to carry over 24,000 twenty-foot equivalent unts (TEUs).

It will have four multi-purpose berths each having a berth length of 250 metres, four liquid bulk berths, a Ro-Ro berth, small craft (pilot boats and tugs) and coastguard berths and rail terminal.

The core and common infrastructure including a 10.14 km long breakwater, dredging, reclamation, shore protection bund, tug berth, approach trestles and unpaved developed land, rail and road linkages, off dock rail yard, rail exchange yard, power and water and internal road will be built by Vadhvan Port Project Ltd (VPPL) with an investment of Rs43,622 crores.

This includes an investment of Rs1,765 crores by the Ministry of Railways for external rail connectivity, Rs2,881 crores for external road connectivity by the Ministry of Road Transport and Highways/National Highways Authority of India and Rs356 crores as depositary works from Maharashtra Jeevan Pradhikaran and Maharashtra State Electricity Distribution Company Ltd.

The remaining project cost of Rs37,244 crore will be invested by the private operators of container terminals, multipurpose berths, coastal cargo berths, RO-RO and liquid berths selected by VPPL.

JNPA, which is helming the project, has hired IDBI Capital Markets and Securities Ltd as transaction advisor to raise funds for the project.

The development of a modern deep draft port able to attract big container vessels (more than 24,000 TEU's capacity and about 400 meters long) has become imperative keeping in view country's expanding economy and international trade volumes. It is expected that Vadhavan Port will be able to significantly supplement the container handling capacity of the country and create an infrastructure which will serve the economy in the face of global competition by promoting manufacturing activity and ease of doing business, government sources said.

The development of Vadhavan Port also opens an opportunity for India to break into the list of countries with top 10 container ports in the world with its capacity of over 24.5 million TEUs which none of the existing ports in India can offer due to natural limitations.

Due to its strategic location on the west coast at a short distance from international sea route, Vadhavan can also be positioned as a hub port in the Arabian Sea catering to the container traffic of east coast of Africa, India's west coast, and countries in the Persian Gulf reversing the present scenario, the sources said.

Source: The Economic Times 

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