India’s largest container port, Jawaharlal Nehru Port Trust (JNPT), is all set to get a far more powerful deep-draught neighbour that is capable of handling 20 million teu per annum. The proposed Vadhavan port would straightaway catapult it into the list of the world’s top ten container ports, comprehensively dominated by China.
The long-pending plan, which was cleared on Wednesday, 5 February 2020, at a cabinet meeting chaired by Prime Minister Narendra Modi, envisages the construction of a deep-draught port with alongside depth of 20 m that can accommodate the largest container ships in the world. This new port could also cater to JNPT’s spillover traffic.
The upcoming Vadhavan port will be constructed at Dahanu in Palghar district near the Gujarat border, about 160 km northwest of Mumbai, at a cost of INR655.45 billion (USD9.2 billion). The twist in the tale is that Vadhavan would not really be a competitor to JNPT, because the latter would have 51% ownership in the special purpose vehicle (SPV) being created for the execution of the project.
At the moment, container traffic in India is heavily controlled by JNPT, which handles 55% of the country’s export-import boxes. The 30-year-old port, set up in 1989 as a satellite to Mumbai, boasts an annual throughput of 5.13 million TEU from its existing three box terminals, and occupies the 28th position among the world’s top container ports.
After the completion of a fourth container terminal in 2023, JNPT’s capacity will increase to 10 million TEU, making it the 17th biggest container port in the world. However, it would still be a far cry from muscling into the elite top ten, seven of which are Chinese, and all seven ports handled more than 15 million TEU in 2019 alone.
JNPT’s biggest problem is an alongside draught of 15 m is grossly insufficient to handle vessels above 10,000 TEU. Even Mundra, farther north on the western Indian coastline, has a maximum draught of 16 m and can handle only mid-size container ships; this discourages mainline operators from sending their latest-generation container vessels to India.
Situated in a picturesque coastal tract, Vadhavan has a natural draught of about 20 m close to the shore, making it an ideal port for handling modern, mega container vessels in the 15,000–25,000 TEU range.
“The central government will retain a 51% share of the SPV that will be formed with JNPT as the lead partner, for the execution of the Vadhavan project on the public-private partnership (PPP) model,” said Shipping Minister Mansukh Mandaviya. “The Maharashtra Maritime Board and private players can have the rest of the equity in the SPV.”
The SPV will be the port’s landlord and will be charged with developing its infrastructure, including reclamation, constructing breakwater, and establishing connectivity to the hinterland. All business activities related with the port’s functioning will be undertaken by private developers.
The Vadhavan project, initially thought of in 2017, could well suffer further delay in the face of opposition by two local environmental bodies: Vadhavan Bandar Virodhi Sangharsh Samiti (VBVSS) and Dahanu Taluka Environment Protection Authority (DTEPA).
The Greenmen, led by the VBVSS, called the government’s clearance of the Vadhavan proposal an erroneous move, given that the matter was still in the Supreme Court of India. The DTEPA had, in 2017, ruled that the port could not be located at the site selected for it, as it would seriously damage the environment.
However, the Ministry of Environment, Forest and Climate Change (MoEFCC) has appealed to the apex court to dissolve the DTEPA, stating that the body had outlived its usefulness.
The next hearing in the Supreme Court is on Thursday, 13 February.