Three Years And Counting: Parliamentary Committee Urges Government To Expedite Work On Vadhavan Port In Maharashtra

A parliamentary committee has urged the Ministry of Ports, Shipping and Waterways to make more efforts to develop the Vadhavan Port rapidly.

In its latest report, the department-related standing committee on Ports noted that three years have passed since the ‘in-principle’ approval of the port and hence more efforts are required for building the greenfield port.

The Union Cabinet in Feb 2020 had approved setting up a new major port at Vadhavan near Dahanu in Maharashtra at a cost of RS 65,544.54 crore.

The Ministry of Ports has proposed to develop Vadhavan Port as India’s largest deep draft port in Land lord model by a Special Purpose Vehicle (SPV) incorporated under Companies Act, 2013, with Jawaharlal Nehru Port Trust (JNPT) as the lead partner.

Under this Model, the port authorities develop the core assets and most of the commercial activities are handled by the private operators under the framework of a Concession Agreement.

The SPV with JNPT as the lead partner will develop the port infrastructure, including reclamation, construction of breakwater, and establishing connectivity to the hinterland. All business activities would be undertaken under public private partnership (PPP) mode by private developers.

The Project

The port project is part of the Centre’s Sagarmala initiative that aims to make Indian ports major contributors to the country’s GDP.

The Vadhavan port has been planned by the JNPT as an ‘All Weather, All Cargo’ satellite port to enhance capabilities in handling deep draft ships and larger vessels.

One of the prime advantages of the Vadhavan Port is its natural draft which is about 20m close to the shore. It will aid in accommodating huge container ships.

The development of India’s 13th major port, in Maharashtra, is currently at the stage of environmental clearance.

Deep Draft Port

The JNPT and Mundra, the two largest container handling major ports of the country can handle only mid-size container ships as they have a draft of 15 metres and 16 metres respectively.

Compared to this, the world's largest container handling modern deep draft ports require a draft of 18-20 metres. The ever-increasing size of container ships makes it imperative that a deep draft container port in West Coast of India is developed to accommodate such ships.

The Vadhavan port with a natural draft of about 20 meters makes it possible for the port to handle bigger vessels. Development of Vadhavan port will enable call of container vessels of 16,000-25,000 TEUs capacity, giving advantages of economies of scale & reducing logistics cost.

A TEU or Twenty-foot Equivalent Unit is an exact unit of measurement used to determine cargo capacity for container ships and terminals. 

Boosting Container Traffic

JN Port, the biggest container port in India, currently holds 28th position in the world with a traffic of 5.1 million TEUs. Moreover, container traffic in the JNPT is expected to grow to 10.1 Million TEUs by 2022-25 when JNPT's potential will be fully exhausted.

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.

Even after the completion of the fourth terminal at JN Port with a capacity increase up to 10 million TEUs by 2023, it will stand as the 17th largest container port in the world.

With the development of Vadhavan port, India will break into the countries with top 10 container ports in the world - the port will add approximately 15 Million TEUs by the year 2035.

With an increase in container shipping, the port, which will be close to the JNPT in Uran, Navi Mumbai, is also expected to handle the spillover in container vessel traffic at the Jawaharlal Nehru Port.