India's First Deep Water Container Transshipment Port - VISL
The Vizhinjam International Transhipment Deepwater Multipurpose Seaport is an ambitious project taken up by Government of Kerala. It is designed primarily to cater container transhipment besides multi-purpose and break bulk cargo. The port is being currently developed in landlord model with a Public Private Partnership component on a design, build, finance, operate and transfer (“DBFOT”) basis. The private partner, the Concessionaire M/s Adani Vizhinjam Port Private limited has commenced the construction on 5th December 2015.
Vision : To be the preferred international transshipment gateway on the Indian subcontinent known for operational excellence, industry leadership and sustainability enabled by a future-ready port ecosystem.
Mission : To develop Vizhinjam Port as a pioneering deepwater transhipment hub leveraging cutting-edge infrastructure and technology to enable global trade, boost India’s blue economy and foster inclusive growth.
WHY VIZHINJAM?
STRATEGIC LOCATION
Strategically located just 10 nautical miles from the busy international shipping route connecting Europe, the Persian Gulf and the Far East, Vizhinjam enjoys inherent locational advantages that position it for success as a global transshipment hub. Its proximity to the East-West axis which accounts for a substantial quantum of global maritime trade provides easy access without deviation for the large vessels that form the lifeline of today’s ocean commerce.
NATURALLY ADVANTAGED
Gifted by nature with a deep draft of 18m close to shore that requires no capital dredging, Vizhinjam can leverage its natural depth to host even ultra-large next-gen container ships requiring 20m+ drafts. Its curvilinear coast mitigates tsunami impact while the port’s positioning results in only mild erosion, minimizing maintenance costs. With capacity for 18,000+ TEU ships, scalable infrastructure to match cargo growth and minimal siltation, Vizhinjam is future ready.
Background
Ports are one of the most crucial links in the development of a country’s trade and its economy. This is self evident
in the case of insular economies such as Hong Kong and Singapore or the United Kingdom. Even for continental
economies like India, globalisation of trade is key to development of the economy. Since this trade is carried
primarily by sea-borne vessels, port development gains strategic importance as the key to economic development.
India has an approximately 5,423 km long peninsular coastline and is located close to major shipping routes linking
East Asia, Europe and the Middle East. India therefore has the potential to significantly grow it’s maritime trade with
other countries and as its economy grows, necessity of developing ports for international trade will also grow.
Presently there are 12 Major Ports and 187 Non-Major ports in India. The Major Ports are all Government owned
and handle around 64% of India’s maritime trade.
The country’s ports sector has witnessed strong growth over the past decade with total traffic handled by it
increasing from nearly 300 million tonnes in FY01 to 883 million tonnes in FY11. The traffic-handling capacity of
major ports increased at a CAGR of 7.3% during 2006–2011 to reach 645 million tonnes. During the same year,
traffic handled at non-major ports grew at 8.6% year on year, largely due to the 12.4% year on year growth of
Gujarat Maritime Board (GMB) ports.
The 12 major ports carry about 64% of the total maritime transport of the country. The share of non-major ports in
cargo traffic has increased from less than 10 per cent in 1990 to the current levels of 36% due to congestion and
inefficiencies at major ports and with development of minor ports by the respective states. There has been an
impressive growth of about 11.6% per annum in container traffic during the five years ending 2010-11. The
container trade went up to 10 million twenty-foot equivalent units (TEU) by 2012 from 2.47 million TEU in 2000.
Along its coastline of nearly 585 km, Kerala has one major port at Cochin and 17 non major ports. The non major
ports are under the administration of Government of Kerala. Government of Kerala intends to provide a boost to
coastal shipping with further development of ports, which will ease the burden on the heavily congested highways
in the State apart from savings in transportation and social-emissions cost. Government, besides acting as a
catalyst for establishment of new ship repair and ship building industries, also encourages other port based
industries contributing to the development of ports. Currently, Kerala government is in the process of modernizing
ports at Vizhinjam, Azhikkal, Beypore and Alappuzha.
The Government of Kerala (GoK) through its special purpose government company (SPV)-Vizhinjam International
Seaport Ltd (VISL), is developing deep water Multipurpose Greenfield Port at Vizhinjam in Thiruvananthapuram,
capital city of Kerala. The SPV is fully owned by the Government of Kerala.
The GoK through VISL, appointed the International Finance Corporation (IFC) as its Transaction Advisor to assist
in the structuring and implementation of the Vizhinjam Port project and also to help organize a well structured and
transparent bid transaction as the port was initially proposed to be developed based on PPP model. IFC with the
help of Drewry Shipping’s International, UK, carried out the market assessment and Royal Haskoning as their
technical consultant to prepare preliminary project plan for the proposed development. Drewry in their studies
indicated that because of a small immediate hinterland, the biggest potential for Vizhinjam project was to attract
container transshipment traffic. However, because of the intense competition from the ports of Colombo and
Vallarpadam terminal in Cochin and other ports, it was projected that Vizhinjam would need to aggressively price
its container handling services to be able to attract traffic away from the competing ports.
The bidding for the project development took place for two rounds as part of the PPP process. In the first round in
2004, consortium of Kaidi Electric Power Private Ltd (lead), Zoom Developers Pvt. Ltd and China Harbour Engg
was selected but could not get security clearance from the Government of India. In the second round in 2007,
consortium of Lanco Kondapally Pvt Ltd (lead), Lanco Infratech Ltd and Pembinan Rezdai, Malaysia was selected.
Prolonged litigation by one of the unsuccessful bidders against the evaluation of the bids eventually resulted in the
winning bidder to withdraw after the letter of award was issued. In the latest round in 2010 based on “Landlord Port
Model”, out of the two bidders, only one consortium (Welspun Infratech Limited (India) (lead); Welspun Corp.
Limited (India) and Leighton Contractors (India) Private Limited with no operator in the consortium) got security
Development of Vizhinjam Port
Detailed Project Report 1-2
clearance. Later the Govt. cancelled the bid and decided to go for fresh bid after obtaining environmental
clearance.
The proposed project is based on a Landlord Port Model1
, where all the civil work facilities viz., construction of
basic infrastructure like breakwater, quay wall, dredging, reclamation, rail and road access to the Port will be
developed by VISL. Port Operation will be through the PPP model for an agreed concession time period. Terminal
operator(s) may be required to develop the container yard, terminal buildings, and purchase & operate the cargo
handling equipments, depending on the final project structuring plan adopted by VISL. It is envisioned to develop
this port incorporating the proven and cost effective Green Port initiatives in all aspects of construction and
operation.
TRANSSHIPMENT HUB
Being the southern tip of India, Vizhinjam is strategically poised to emerge as a transshipment hub that can consolidate and transfer Indian and regional origin cargo to mainline vessels at lower costs than routing them via Colombo. By locating a world-class Indian transshipment port right on top of a core international shipping lane, Vizhinjam can unlock lasting maritime and economic advantages for the country.
Vizhinjam International Seaport Limited (VISL) – a Company fully owned by Government of Kerala, was incorporated to implement the flagship project – the Vizhinjam International Seaport Project, the country’s first deep-water transhipment port.
The Company is envisaged to facilitate the development of a deep-water port at Vizhinjam and be a prime mover of a sea change for the global maritime trade thereby empowering regional and national economic growth. VISL provides all supporting modern infrastructure for the development of Vizhinjam Port Project as well as other development needs such as Logistics Centre / Free Trade Zone / Warehousing Zone for the port project and allied projects which could be facilitated on account of the project.
VISL will be in the forefront to head allied projects and spearhead port led development in the State to the fullest. This will ensure immense potential for future business, logistics and create employment opportunities paving way for a developed State. The Vizhinjam International Seaport and the Port-led activities is envisioned to be the engine of the Nation’s development as it would be the Gateway of South India.
