The Jawaharlal Nehru Port Authority (JNPA) has rejected a proposal to join as an equity partner in the special purpose vehicle (SPV) formed by the Ministry of Ports, Shipping, and Waterways to build a major international container transshipment port at Galathea Bay in the Great Nicobar Island.
The project, set to require an investment of Rs 44,000 crore, is backed by several state-run port authorities.
The ministry had sought JNPA, which operates India’s busiest state-owned container port, to invest Rs 1,400 crore in the SPV. Other participants include Deendayal Port Authority, Paradip Port Authority, and V O Chidambaranar Port Authority.
However, JNPA has expressed its inability to commit to the Galathea Bay project, citing its existing focus on the ambitious Vadhavan Port project in Maharashtra. “JNPA is committed to the Vadhavan Port project for the next few years and cannot allocate funds as an equity partner for the Galathea Port project,” an official stated, reports Economic Times.
The decision is seen as essential to safeguarding the Vadhavan Port project, which has an estimated cost of Rs 76,220 crore. The government has already ruled out providing budgetary support for Vadhavan and has advised JNPA against offering corporate guarantees when raising loans for the development.
Industry experts have backed JNPA’s stance, given that the port authority’s current cash reserves of over Rs 6,000 crore could dip into the negative during the implementation of the Vadhavan project. Diverting funds to the Galathea project could risk jeopardising the progress of Vadhavan.
Once completed, Galathea Bay will be the 14th major port in India. It will be developed in four phases. The port will be built on a ‘landlord model’, where the government will develop common infrastructure, while cargo handling will be outsourced to specialised operators for up to 50 years.
Significance Of The Project
Currently, nearly 75 per cent of India’s transhipped cargo is handled at ports outside India, with Colombo, Singapore, and Klang handling over 85 per cent of this cargo. More than half of this transhipped cargo is managed at Colombo port.
The proposed Galathea Bay port is strategically located along key global trade routes, positioned 40 nautical miles from the Malacca Strait, through which 35 per cent of the world’s annual sea trade flows.
With natural water depths exceeding 20 metres, the port is expected to handle some of the world’s largest container ships and capture transshipment cargo from ports along the Indian east coast, Sri Lanka, Bangladesh and Myanmar.
