Explained: Karnataka Big Bet On Port-Led Development Strategy As It Invites Global Tender For Two New Ports At Keni And Pavinakurve

The Bharatiya Janata Party (BJP) government in Karnataka, led by Chief Minister Basavaraj Bommai, has invited global tenders to develop an all-weather deepwater greenfield port at Keni-Belekeri and Pavinakurve.

The port will be developed on a public-private partnership-design, build, finance, operate and transfer (PPP-DBFOT) model. 

In March 2021, former chief minister B S Yediyurappa first announced that Rs 3,000 crore would be invested in developing two greenfield ports at Belekeri and Pavinakurve in Uttara Kannada district in the state.

His successor Bommai proposed to create the port based on a PPP model while presenting the state budget for 2022-23 to boost economic activity in the Uttara Kannada district.

Keni-Belekeri Greenfield Port

The proposed port is 26 kilometres south of Karwar on the bank of the Hattikeri River and will be a fair weather lighterage port open to traffic for about eight months. It will have a large stacking area, a good road network, and the capacity to handle 3 to 5 million tonnes of cargo.

The Konkan Railway line is about 4 km away. Ankola, the nearest railway station, is approximately 6.7 km southeast of the site. 

Rail connectivity to the project site is proposed on the southern side of the port, which is connected with the existing Konkan line to the north of Ankola station. 

Private entrepreneurs, including Salgoankar Mining, Tungabadhara Minerals and Adani Export have already created loading chutes and other infrastructure facilities for handling bulk cargo at anchorage. Belekeri Port has a vast stacking area, approximately 100 acres.

Once complete, the first phase of greenfield port development at Keni will handle 18 MTPA (million tonnes per annum), including 3 MTPA of thermal coal and 12 to 17 MTPA of coking coal —12 to 17 MTPA.

The initial investment for developing the port is around Rs 2,783 crore. Additional rail and road connectivity is estimated to cost Rs 225 crore.

Pavinakurve Port

The proposed captive port near Pavinakurve village of Honnavar taluk of Uttara Kannada district is expected to play an instrumental role in handling mineral, agricultural, horticultural and marine products. 

Karnataka has a vast wealth of minerals such as iron ore, manganese ore, limestone, bauxite and granite. Pavinakurve will be instrumental in transporting the goods from these areas.

The land for the proposed project will comprise the Basavaraj Durga island and the sea shore of Pavinakurve village, including the reclamation area.

Phase 1 of the port will be developed at an investment of Rs 800 crore with a capacity for handling 5 MTPA. Phase 2 of the port is proposed to develop at an investment of Rs 1,767 crore with the capacity to handle 14 MTPA.

The port will be developed by constructing a 1,000-metre-long wharf. Land and site for the jetty will be leased out to the developer on a concession basis for 30 years.

Pavinakure port is expected to handle 10 MTPA of iron ore, 5 MTPA of limestone and dolomite, 2 MTPA of coking coal and thermal coal and around 0.50 MTPA of finished steel products.

Karnataka's Port-Led Development Strategy

Karnataka has a maritime coastline of about 155 nautical miles (320 kilometres) spread across three districts — Uttara Kannada, Udupi, and Dakshin Kannada. 

There is currently only one major port at Mangaluru, ie, New Mangalore Port Trust, and 12 minor ports between Karwar in the north and Mangaluru in the south.

With the Narendera Modi government's flagship Sagarmala development initiative, Karnataka aims to link the coast with the hinterland through ports, railways and highways.

The state is developing a greenfield port at Honnavar in Uttara Kannada district, costing around Rs 600 crore. The port is being developed under a PPP model between the state government and Honnavar Port Private Limited. 

The port at Kasarkod-Tonka, a third location within the Honnavar taluk of Uttara Kannada, will have a capacity of 5 MTPA once completed. Another port at Manki, in Honnavar taluk of Uttara Kannada, is set to be developed as a captive port by Renuka Sugars.

The state is betting on a port-led development strategy to develop better connectivity to its thriving industrial hinterland that includes 40 MTPA of cement capacity, 25 MTPA of iron and steel capacity, 10 GW (gigawatts) of the installed thermal power plant. 

According to the Karnataka Maritime Board (KMB) officials, better connectivity between ports through inland and coastal waterways will be economically efficient. 

This initiative also sought to generate long-term employment and income for the community by maximising the ports' economic possibilities. 

Karnataka Maritime Board (KMB)

The KMB, under the Infrastructure Ports and IWT department, is leading the infrastructure development related to ports and waterways in Karnataka. 

The KMB aims to facilitate seamless supply-chain logistics for cargo movement within the state and international transhipment hubs.

The state's port policy seeks to develop commercial ports, increase their capacity for handling more cargo, decongest highway traffic by providing facilities for coastal shipping of passengers and cargo traffic, build more captive ports through a PPP model, and create facilities to handle at least 5-10 per cent of the country's cargo.

The state government will invest up to 11 per cent in all PPP port projects and requires the state government to take up the mantle of acquiring land even for private port projects.

In addition, it aims to convert all ports from fair-weather (seasonal) to all-weather ports.

Karnataka's port-led growth model is also getting a much-needed impetus from the Union government's maritime ambitions.

As part of its efforts to attract international investment, the state government is organising a global investors' summit in November to attract significant private capital. 

Prospects For Port-Led Tourism

Furthermore, there is tremendous potential for the ports and waterways to draw tourists to the state.  

Every year, 40,000 international cruise tourists visit Mangaluru, and the Malpe and Karwar beaches see a high volume of visitors. 

Ports can create marinas which are specially designed harbour for pleasure yachts and small boats with integrated amenities on a PPP basis.

Luxury tent accommodations for tourists can be built on port land and marinas where freight movement is restricted. 

The islands managed by the port department can be utilised on a PPP basis for a wide range of projects, including eco-resorts, theme parks, destination weddings, golf resorts, etc. 

The Department of Ports and Inland Waterways Transport, Government of Karnataka, is seeking to develop four inland waterways to cater to passenger and tourism traffic.