Union Cabinet likely to clear Rs 76,220-crore proposal to develop container Port at Vadhavan today

Mar 7, 2024 India Shipping News

NEW DELHI : The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, is expected to clear a Rs 76,220 crore project to develop a new deep-water major port at Vadhavan near Dahanu in Maharashtra on March 7, multiple senior government officials told.

“The Union Cabinet will meet on March 7 and will likely approve the Vadhavan Port project along with some highway projects,” a senior government official told.

He added that a total of 10 major infrastructure projects have been sent to the Union Cabinet for approval.

Similarly, a second senior government official told that the Union Cabinet is expected to approve the proposal for the creation of the Vadhavan Port on March 7 along with proposals of projects for the Guwahati Ring Road and Kharagpur-Siliguri highway.

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 tonnes, and recommended the mega project to the Union Cabinet for a final nod.

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.

The port contours

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

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.

According to Union Ports Minister Shri Sarbanand Sonowal, the 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.

In January 2024 APM Terminals signed an agreement with the Jawaharlal Nehru Port Authority (JNPA) to develop a new container terminal at the proposed Vadhavan port project in Maharashtra.

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 by farmers, fishermen, and locals, the project details were reworked pushing up the total cost of the project to Rs 76,000 crore, from the previous estimated Rs 66,000 crore.

The potential

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.

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.

Sonowal had last month said that the proposed Vadhavan port will fuel substantial industrial growth in the region, creating job opportunities for thousands of young individuals.

Sonowal emphasised the significance of water resources, noting that the central government was actively pursuing initiatives to reduce communication costs and drive industrial development through passenger shipping, cargo, and port-centric development strategies in Maharashtra and other states.