The Vizhinjam international container transhipment port in Kerala is currently under construction, with the first phase expected to be fully commissioned by May 2024. Rajesh Jha, the CEO and MD of Vizhinjam Port, shared the project’s opening timeline during the India Today Conclave South 2023.
Challenges and Progress
Jha acknowledged the numerous challenges faced during the project’s execution, including cyclones, floods, and the pandemic. Despite these obstacles, the port is on track for completion. The first phase will consist of an 800-meter berth and a 3,000-meter breakwater.
Confirmation by Adani Ports and Special Economic Zone Ltd (APSEZ)
Karan Adani, the CEO of APSEZ, confirmed the project’s commissioning schedule during an analyst call. He stated that the first vessel is expected to berth in October of the same year. The Phase 1 completion, including a 400-meter quay, is scheduled for March 2024, with the rest of the project set to be finished by May 2024. Adani emphasized that the full commissioning of Vizhinjam Port is anticipated by May 2024.
The Significance of Vizhinjam Port Project
India primarily relies on transhipment hub ports like Colombo, Singapore, Salalah, Jebel Ali, and Tanjung Pelepas for container traffic. Most of India’s ports have shallow depths, unable to accommodate large ships used in international trade. Vizhinjam Port’s strategic location near the international shipping route from West Asia, Africa, and Europe, along with its natural depth of over 18 meters, presents a unique advantage.
Vizhinjam’s Potential
Vizhinjam Port aims to become an all-weather, multipurpose, deepwater, mechanized, greenfield port. Its proximity to the international East-West shipping route, along with a 20-meter contour within one nautical mile from the coast, eliminates the need for maintenance dredging. Additionally, the port offers excellent road and rail transport links, further enhancing its potential.
Projected Capacity
Once Phase 1 becomes operational, Vizhinjam Port is expected to handle 1 million TEUs (20-foot equivalent container units). Subsequent phases will add another 6.2 million TEUs, accounting for over 70 percent of India’s current transhipment volume.
Funding Model
The port is being constructed under a landlord model with a Public Private Partnership component based on a design, build, finance, operate, and transfer (DBFOT) basis. The Central and State governments are providing a grant of Rs.1,635 crore (about 40 percent of the project cost) under the Viability Gap Funding (VGF) scheme. Adani Ports and Special Economic Zone Ltd (APSEZ) won the project bid in 2015.
Concession Agreement and Government Involvement
Under the concession agreement, Adani Group has the exclusive right to operate the port initially for 40 years, extendable to 60 years if the second phase is completed by the group within the first 30 years. The Kerala government will invest around Rs.3,436 crore in basic infrastructure civil works, while collecting a premium revenue share from the private operator starting from the 16th year of operations.
Conclusion
Despite various challenges, Vizhinjam Transhipment Port in Kerala is set to become a major transhipment hub in India. Its deepwater capacity, strategic location, and comprehensive infrastructure make it an ideal choice for handling significant transhipment cargo. The completion of the first phase by May 2024 will mark a significant milestone in India’s maritime trade ambitions.
