CCEA may consider Rs 76,220-crore Maharashtra Container port plan Today

Jun 19, 2024 India Shipping News

MUMBAI : The Cabinet Committee on Economic Affairs (CCEA), scheduled to meet at 5 pm on June 19, is expected to take up the proposal to develop a new deep-water major port at Vadhavan near Dahanu in Maharashtra, three officials close to the development told.

“The project for the development of Vadhavan Port is on the agenda for the CCEA and will be taken up when they meet this week,” a senior government official aware of the ongoing discussion said.

The port, to be helmed by Jawaharlal Nehru Port Trust (JNPT), would come up in the eco-sensitive Dahanu taluka in Maharashtra’s Palghar district, around 150 km from Mumbai.

Vadhavan will be constructed by a joint venture in which Jawaharlal Nehru Port Authority (JNPA) will have a 74 percent stake and Maharashtra Maritime Board will hold 26 percent.

The official added that the proposal for the Vadhavan Port project was a part of the 10 major infrastructure projects sent to the Union Cabinet for approval in March 2024. However, the approval was delayed after the Prime Minister’s Office (PMO) made a few suggestions for the project.

“The final investment proposal has been made after considering the PMO’s suggestion in March, and we expect the project to be approved now,” the government official said.

Last week, Shri Unmesh Wagh, Chairman of JNPA, told in an interview that the Authority will start awarding tenders for Vadhavan Port by August as soon as the Cabinet approves the project.

“We had expected the Union Cabinet to clear the Rs 76,220-crore project before the model code of conduct kicked in, but unfortunately, that has not come so far. But this is a priority of the government,” Wagh had told last week.

In March 2024, Shiv Sena (UBT) chief Uddhav Thackeray had vowed to scrap the Vadhavan port project citing opposition by the local fishermen.

Addressing a rally in Boisar in Maharashtra in March 2024, Thackeray had said the Vadhavan project was earlier considered and scrapped when the Shiv Sena-BJP was in power during 1995-1999. He added that he had personally visited the area and interacted with the villagers and fishermen in the late 90s.

“If you are going ahead with Vadhavan project by not taking into consideration the concerns of people, then go ahead. We will run the people’s bulldozer over this government,” Thackeray had said at the rally.

However, the BJP has won the Palghar seat in the recent Lok Sabha elections, a constituency reserved for Scheduled Tribes candidates.

The new BJP member of parliament Hemant Sawra, who replaced Shiv Sena incumbent Rajendra Gavit, pledged on June 16 to overcome land acquisition hurdles to fast-track key infrastructural initiatives, including the Vadhavan port.

The Public Investment Board in February cleared the construction of a container terminal that will have a capacity to handle annual cargo of 23 million twenty-foot equivalent units (TEUs), or 254 million tonne, and recommended the mega project to the Union Cabinet for a final nod.

Once fully completed by 2035, the Vadhavan Port is expected to be the fourth largest port in India after Deendayal Port, Mundra, and Visakhapatnam Port. The Vadhavan Port will enable the movement of container vessels of 16,000-25,000 TEU capacity. It will provide economies of scale and reduce logistics costs, according to the Centre.

The port contours

Nestled towards the north of Mumbai along the Arabian coast, Vadhavan Port provides an ideal location for a port with a natural draft of 20 meters depth at a distance of 5 km.

To be built in phases, the port will handle 15 million TEU containers in the first phase and 23.2 million TEUs after the commissioning of its second phase. Its proximity to Mumbai as well as Gujarat along the western coast along with established connectivity to northern and central India via the national railway network and NH8 add to its attractiveness as a trade gateway to the region.

According to Union Ports Minister Shri Sarbananda Sonowal, the Special Purpose Vehicle (SPV) will invest close to Rs 37,000 crore for setting up basic infrastructure, while around Rs 38,000 crore will come from private operators interested in operating the proposed deep-draft port.

Sonowal had earlier this year said that the port would fuel substantial industrial growth in the region, creating job opportunities for thousands of young individuals.

In January 2024 APM Terminals signed an agreement with the JNPA to develop a new container terminal at the Vadhavan port.

The Netherlands-headquartered APM Terminals operates 62 container terminals globally, including two in India — Pipavav in Gujarat and Nhava Sheva at Jawaharlal Nehru Port in Mumbai.

The Union Cabinet in February 2020 had approved setting up Vadhavan port under the Sagarmala Programme.

In October 2023 the DP World also signed an MoU to initiate willingness and cooperation for the development of the Vadhavan Port.

Environmental clearances

The Ministry of Environment, Forest and Climate Change granted environmental and coastal regulation zone clearance for the project in February.

The Vadhavan Port Project Ltd – a special purpose vehicle (SPV) between the JNPA and the MMB – conducted 26 surveys and studies through agencies in India about various environmental aspects and the impact of this port.

After running into initial opposition from farmers, fishermen, and locals, the project details were reworked pushing up the total cost of the project to Rs 76,000 crore, from the earlier estimated Rs 66,000 crore.