Vadhvan Port

Posted 17 Oct 2024

Updated 23 Oct 2024

6 min read

Why in the news?

Prime Minister Narendra Modi laid the foundation stone for Vadhvan Port in Maharashtra's Palghar.

Located near Dahanu town in Palghar district in Maharashtra.
It will be established as the 13^th Major port in the country.
It will be the country's largest container port and one of India’s largest deep-water ports.
The Project will be constructed by Vadhavan Port Project Limited (VPPL), a Special Purpose Vehicle.
- VPPL is formed by Jawaharlal Nehru Port Authority (JNPA) and Maharashtra Maritime Board (MMB) with a shareholding of 74% and 26%, respectively.
The initiative aims to establish a global maritime hub that will boost the country's trade and economic growth by accommodating large container vessels and ultra-large cargo ships.

Large Capacity: It is expected to handle 254 million tonnes of cargo annually, making it one of India's largest container port.
Can accommodate very large container ships: The port, with a natural draft of approximately 20 meters, will accommodate large container ships that are currently unable to dock at most Indian ports.
Modern port infrastructure: Equipped with state-of-the-art technology and infrastructure like deep berths and advanced cargo handling systems.
Expected to generate employment opportunities and stimulate local businesses: Due to its proximity to the Western Freight Corridor and the Delhi-Mumbai Expressway it will create new business opportunities and warehousing opportunities.
Aid trade flow and enhance India's maritime connectivity and global trade hub status: As it would act as a gateway for the IMEEC (India Middle East Europe Economic Corridor) and INSTC (International North South Transportation Corridor).
Reducing transit times and costs: By providing direct connectivity to international shipping routes.
Priority to sustainability: It incorporates sustainable development practices and stringent ecological standards, aiming to minimize environmental impact.

India is the 16th largest maritime country in the world.
Indian Maritime Sector contributes to 95% of India’s trade by volume and 70% by value.
According to World Bank's Logistics Performance Index, India ranks 22nd in the International Shipment category, with a better "Turn Around Time" of 0.9 days compared to the USA, Australia, and Singapore.
The Indian port sector is divided into two segments: major ports and non-major ports.
- India has 12 major ports (13^th Vadhvan and 14^th Galathea) and 200+ non-major ports.
The Ministry of Ports, Shipping & Waterways controls major ports in India:
- Chennai, Cochin, Deendayal (Kandla), Jawaharlal Nehru (Nhava Sheva), Kolkata, Mormugao, Mumbai, New Mangalore, Paradip, Visakhapatnam, VO Chidambaranar (Tuticorin), and Kamarajar Port Ltd.

Major ports are administered directly by central government.
The Major Port Authorities Act, 2021 provides for regulation, operation and planning of major Ports in India.
Major ports are run by respective port authorities on a landlord model.
Private Sector participation in Major Ports
- Allowed for specific projects through concession agreement.
- Asset is handed over to Port Authority after concession period expiry.

Non-major ports fall under the jurisdiction of state governments.
Non-major ports are governed under the Indian Ports Act, 1908.
These ports come under the purview of the respective state governments and regulated by state departments, or the state maritime boards.
The State Maritime Boards/State Government enters into a concession agreement with the private operator to develop and operate the minor port in Public Private Partnership (PPP).

Financial Challenges: Difficulty in accessing financing from banks and financial institutions, deterring private sector participation.
Regulatory and Approval Issues: Delays in obtaining government approvals and environmental clearances
Infrastructure and Connectivity Problems: Inadequate-road networks within port areas and poor hinterland connectivity and Lack of basic infrastructure in remote locations for greenfield projects
Labor and Productivity Issues: Overstaffing with unskilled and untrained labor in major ports and Frequent labor strikes
Operational Inefficiencies: Outdated port designs inadequate to meet needs for quick turnaround and increased cargo volumes
Existing Port Upgradation: High costs associated with upgrading older, government-owned ports and there is resistance to change in government-controlled port operations.
Dredging issues: The dredging sector in India faces operational challenges such as lack of standardization, outdated equipment, inefficient soil investigation, and a shortage of trained personnel.
- Dredging is a routine necessity in waterways around the world because sedimentation—the natural process of sand and silt washing downstream—gradually fills channels and harbors.

Port Modernisation: Increase cargo handling capacity by:
- Enhancing the minimum draft (minimum depth of water needed by a vessel for safe navigation) of Indian ports through dredging
- By implementing modern cargo handling techniques.
Enhancing connectivity by:Conducting environmental impact assessment before releasing funds for connectivity projects to avoid project delays.
- Linking private ports with major and minor ports.
Encouraging Public Private Partnership (PPP) Projects by:
- Rationalising taxes to attract foreign shipping companies
- Providing financing to private sector for modernisation of non-major ports
- Creating a specialised maritime fund for supporting inland waterway operations and vessel financing through PPP mode
Clearances: Fixing timeframe for timely regulatory clearances and setting up a single window approval system for PPP projects.
- Rationalise documentation, process all documents through a common digital platform proposed as “National Portal for Cargo Facilitation”.

Sagarmala Programme: Launched in March 2015, aims to reduce logistics costs for foreign and domestic trade, optimize container movement, and enhance export competitiveness.
Maritime Amrit Kaal Vision 2047: Developed by the Ministry of Ports, Shipping & Waterways, it aims to develop world-class ports, promote inland water transport, coastal shipping, and a sustainable maritime sector.
- It includes over 300 actionable initiatives to enhance ports, shipping, and waterways by 2047, based on over 150 consultations and international benchmarks.
National Logistics Portal (Marine): It is an IT platform that enhances efficiency, transparency, and reduces costs and delays by connecting stakeholders in the logistics sector.
Sagar Manthan: It is a digital platform providing real-time performance monitoring dashboard for the Ministry and its organizations, enabling the tracking of projects, KPIs, and financial parameters.
SAGAR-SETU: It is a mobile app that enhances the Ease of Doing Business by providing real-time port operations, monitoring, and access to vessel, cargo, container, finance, and regulatory authority data.