Karnataka: JSW Infra Bags Greenfield Keni Port Project For Rs 4,119 Crore

JSW Infrastructure, the ports unit of Sajjan Jindal-led JSW Group, has emerged as the winning bidder for development of greenfield port at Keni in Karnataka on public-private partnership basis.

It is envisaged as an all-weather, greenfield, multi-cargo, direct berthing, deep-water commercial port for handling all types of the cargoes on the west coast in North Karnataka region to serve the industries in the area covering Bellary, Hosapete, Hubballi, Kalaburagi and South Maharashtra.

Earlier in September 2022, the state government had invited global tenders to develop the greenfield ports at Keni on a design, build, finance, operate, transfer (DBFOT) basis.

JSW Infrastructure emerged as the lone bidder for the project, the first greenfield private port to be developed by Karnataka.

The Karnataka Maritime Board, the Karnataka government entity tasked with developing ports in the state, issued the Letter of Award to JSW Infrastructure on Thursday (16 November).

The second-largest commercial port operator in India proposed a royalty of Rs 17.25 per metric ton of cargo for the successful bid.

According to the Karnataka Minor Port Land Allotment Policy, this royalty will increase by 2 per cent each year. The "blended royalty" will be irrespective of the cargo handled, including containers.

As per the RFP document, the estimated cost of the Project is Rs 4,119 crore with initial capacity of 30 million tonnes per annum (MTPA) which can be expanded to 56.5 MTPA on demand.

The proposed Keni Port would have modern environment-friendly mechanised facilities for handling cape-size vessels (large vessels that cannot pass through Panama Canal and have to sail around Cape of Good Hope and Cape Horn).

Interestingly, Keni Port would be located strategically between two operational major ports — Mormugao Port in the north and New Mangalore Port in the south.

The proposed port’s hinterland is primarily of coal and coke cargo, which is being utilised for steel, cement, and power plants. It is also further supported by Iron ore, limestone, dolomite handlings, and export of finished steel products. 

As per the Karnataka Maritime Perspective Plan, Karnataka is currently having hinterland potential of 44 MTPA of cargo and the same is expected to increase to 117 MTPA by 2035.

On comparison of the future demand and the capacity being handled by the present ports, there is a need for a deep draft port to fulfil the cargo handling gap requirement in future. Hence, the concept of development of the Port at Keni emerged.

Once developed, the Keni port is expected to crucially address the rising import and export trade momentum of the region.