How India's Rs 18,000 Crore International Container Transshipment Terminal On Nicobar Island Will Take Shape

The Ministry of Ports, Shipping and Waterways has invited expressions of interest (EOI) from interested parties to develop first phase of international container transshipment port (ICTP) project at Great Nicobar Island, in the Bay of Bengal. 

Development of a greenfield port is part of the Island Development program which envisages holistic development of the Great Nicobar Island.

As part of this, four projects namely, a port, greenfield international airport, township and a power plant are slated to come up in the southernmost island of India.

The proposed port will come at Galathea Bay in Great Nicobar Island of the Union Territory of Andaman and Nicobar Islands.

The environmental clearance for all these projects has been accorded.

Deep Draft Port

Transshipment is when a cargo or a container is moved from one vessel to another, while in transit to its final destination.

The Galathea Bay has a natural draft of 20 metres and hence, provides a natural advantage for transshipment.

The bay is strategically located along the international trade route in the Indian Ocean Region, midway between existing transshipment terminals at Singapore, Klang and Colombo.

The proposed port, therefore, has been envisaged as an all-weather deep seaport with ability to capture transshipment cargo from India's East Coast ports, Bangladesh and Myanmar.

The transshipment port, with its higher draft and greater efficiency, will provide an alternative option to shipping lines for containers transshipment along Malacca Strait.

The Straits of Malacca is a narrow stretch of water in South-East Asia and is located between the east coast of the Indonesian island of Sumatra and the west coast of the Malay Peninsula.

The strait is the main and quickest shipping channel between the Indian Ocean and Pacific Ocean, and handles about 35 per cent of the annual global sea trade.

Phase-Wise Expansion

The Port facilities are proposed to be developed in four phases between 2028 and 2058 and would handle 16 million containers per year, in the ultimate stage of development.

The first phase, upon completion in 2028, will handle 4 million containers per year. The estimated cost for the first phase of the port is Rs 18,000 crore.

Global-level infrastructure such as breakwaters, 400 m wide navigational channel, container yard, container berth, container handling equipment, two liquid cargo berths to support bunkering operations and ship repair facilities are some of the key facilities to be developed as part of the first phase of ICTP project.

Landlord Mode

Syama Prasad Mookerjee Port, Kolkata (SMPK) is the nodal agency for undertaking development of proposed port project in landlord mode.

In this model, the publicly governed port authority acts as a regulatory body and as a landlord, while private companies carry out port operations — mainly cargo-handling activities.

Here, the port authority maintains ownership of the port, while the infrastructure is leased to private firms that provide and maintain their own superstructure and install their own equipment to handle cargo. In return, the landlord port gets a share of the revenue from the private entity.

According to the EoI, the Port Authority will provide the basic infrastructure and 125 hectares of reclaimed land for development of the container yard and other infrastructure facilities.

On the other hand, the chosen Concessionaire will design, finance, construct, operate and maintain the container handling facilities envisaged in Phase-I under a long-term concession agreement of 30-50 years.

The Concessionaire shall have the flexibility to develop storage area and handling equipment based on their market assessment subject to the minimum guaranteed traffic. It will be responsible for the provision of port services and shall have the rights to levy, collect and retain charges from port users.

The EOI pertaining to ICTP, Galathea Bay has been released on 28 January 2023 and interested parties can submit their bids by 7 March 2023.

Also read: Explained: Why India Is Building A Container Transshipment Port In Andaman And Nicobar Islands