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The Prime Minister to inaugurate Vizhinjam port: significance of India’s first transshipment hub

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Inauguration of Vizhinjam Deepwater Transshipment Port

Prime Minister inaugurates India’s first deepwater transshipment port at Vizhinjam, Kerala, aiming to make India a key global shipping hub and reduce logistical costs. The port is developed under a public-private partnership, operated by the Adani Group, with the Kerala government holding the majority stake.

Key Features of Vizhinjam Port

  • Constructed at a cost of approximately Rs 8,900 crore.
  • Located close to international shipping routes with a natural draft of around 20 metres.
  • Began receiving large vessels in April, with MSC Türkiye being the first vessel with a capacity of over 24,000 containers.

Strategic Importance of a Transshipment Hub

  • A transshipment port facilitates the transfer of cargo from one vessel to another.
  • India previously lacked a full-fledged deepwater container transshipment port, relying on foreign ports like Colombo and Singapore.
  • This reliance led to longer transit times and higher costs, amounting to $80-$100 extra per container and an estimated loss of $200-220 million annually.
  • Establishing a domestic transshipment port can enhance self-reliance and reduce geopolitical risks to supply chains.

Advantages of Vizhinjam Port

  • Strategic location 10 nautical miles from the congested east-west shipping lane.
  • Natural depth of 18-20 metres allows docking of the world’s largest cargo vessels without costly dredging.
  • Minimal littoral drift reduces maintenance costs.
  • Excellent onshore connectivity with proximity to a national highway, rail line, and Trivandrum airport.

Economic Implications

  • Currently capable of handling 1 million containers annually, with plans to expand to an additional 6.4 million.
  • Adani Ports and SEZ Ltd hold a 28.9% stake, enhancing its market position.
  • Kerala state government owns 61.5% and the Union government holds 9.6%.
  • Expected to lower logistics costs and increase India’s share in transshipment trade.

Future Developments

  • Another deepwater port is under construction in Vadhvan, Maharashtra, with work starting in August 2024.
  • A proposed mega transshipment port on Great Nicobar Island awaits regulatory approval.
  • India has 13 major ports and 217 non-major ports, including major ones like Jawaharlal Nehru Port and Mundra port handling over 7 million containers annually.
  • Tags :
  • Ports
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