Cabinet approves to set up Vadhavan port in Maharashtra

The Union Cabinet has given a nod to set up a major port at Vadhavan near Dahanu in Maharashtra with a total cost of Rs 65,545 crore which includes Rs 14,500 crore of GST.

This is part of the government’s plan to develop infrastructure projects with a cost of Rs 100-lakh crore over the next five years.

Speaking to reporters — at a post-Cabinet briefing — on plans for the Vadhavan port, Shipping Minister Mansukh L Mandaviya said, “This will be a deep draft port of 20 metres depth that can handle bigger ships.”

He also added that there is a proposal of government to own 51% of the port and the rest can be owned by private participants and the State government. Vadhavan port will be developed on the “land lord model”. A Special Purpose Vehicle (SPV) will be formed with Jawaharlal Nehru Port Trust (JNPT) as the lead partner with equity participation equal to or more than 50% to implement the project.

Development of Vadhavan port will enable call of container vessels of 16,000-25,000 TEUs capacity, giving advantages of economies of scale and reducing logistics cost, the official statement.

The SPV will develop the port infrastructure including reclamation, construction of breakwater, besides establishing connectivity to the hinterland. All the business activities would be undertaken under PPP mode by private developers.

JNPT and Mundra, the two largest container handling ports of the country (for mid-size container ships only), have drafts of 15 metres and 16 metres. Vadhavan port has a natural draft of about 20 metres close to the shore, making it possible for it to handle bigger vessels at the port.