Adani Ports and Special Economic Zone on Monday signed a concession agreement to develop the much-publicized Vizhinjam International Container Transshipment Terminal, allowing India’s largest private port developer to begin construction on the green-field project November 1.

The first phase of the project will include a total berth length of 2,625 feet and a 53-hectare (131 acres) container yard. The new facility is designed to handle ships up to 18,000 20-foot-equivalent units with an initial annual capacity of 1 million TEUs.

"Our objective is to have Vizhinjam port operational in a record time of less than 1,000 days,” said Adani Group chairman Gautam Adani, speaking at the signing ceremony in Trivandrum.

APSEZ won a 40-year concession to design, build and operate the Vizhinjam terminal in Kerala state, its ninth venture in the country, in June after it emerged as the lone bidder for the Rs. 7,525 crore (about $1.16 billion) project.

Given its close proximity to international shipping routes and deep natural water depth, which about 59 feet with room to increase it to 72 feet through dredging), Vizhinjam is central to India’s effort to compete for more transshipment cargo, especially for ports on the country’s southeastern coast.

A recent port performance analysis by the Ministry of Shipping said major east coast ports mostly carry out feeder rather than transshipment activities, sending and receiving cargo via other hub ports in the region such as Colombo, Sri Lanka; Singapore and Jebel Ali, United Arab Emirates.

While APSEZ and the country have big aspirations for the new facility, India’s cabotage laws are a major hurdle to their realization. In an attempt to make the project more viable as a container hub port, the state of Kerala is lobbying hard for the federal government to relax the cabotage law for foreign-flag ships.

"I expect a favorable decision from Prime Minister Narendra Modi on the matter,” Kerala chief minister Oommen Chandy said.

joc.com