Kerala plans major projects linked to Vizhinjam port

KOCHI:KERALA is planning massive development linked to the Vizhinjam harbour project, currently under construction by Adani Ports.

According to Minister for Finance KN Balagopal, the state is planning various projects including land pooling and public private partnerships in Phase 1 of the Vizhinjam project.

“This is estimated to cost Rs60,000 crore over the years. The Vizhinjam Sea Port can be developed into the biggest transshipment harbour in the world. It is strategically placed on one of the busiest sea routes in the world,” the minister said, while presenting the state budget on Friday.

According to the Economic Review, the total cargo exports from Kerala has increased from 126,619 tonnes in 2018 to 265,538 tonnes in 2022.

The government expects to increase these figures substantially through the $900 million Vizhinjam project. Kerala has four ports with cargo handling capacity, namely, Beypore, Azhikkal, Kollam and Vizhinjam.

Vizhinjam International Transhipment Terminal will be the first deep water transshipment terminal in India. The main advantage of Vizhinjam port is natural depth of 18m, only 10 nautical miles from the major international shipping route and minimal litoral drit along the coast.

The state government has constituted a special purpose vehicle namely Vizhinjam International Sea port Limited (VISL) to facilitate the implementation of the project. Port operation and development is also planned on PPP model for an agreed concession period of time.

With regard to funding for the development of VISL, the largest share comes from the state government which accounts for about 57.5 per cent out of the total funding followed by concessionaire (Adani Vizhinjam Port Private Limited) which accounts for 31.8 per cent and the remaining 10.62 per cent is contributed by the Union government.

India does not have a deep-water container transshipment terminal at present, and is dependent on Colombo, Singapore and Salalah ports. This results in significant loss of foreign currency and revenue, estimated to be about Rs2, 500 crore a year, according to the Economic Review.