Great Nicobar port project is significant for the country as nearly 75% of India’s transshipped cargo is handled at ports outside India. According to official estimates, Indian ports can save $200-220 million each year on transshipment cargo if the Galathea projects comes about.
Private sector players have sought a slew of incentives to set up the roughly Rs 48,000 crore greenfield International Container Transshipment Port in Galathea Bay, at Great Nicobar Island.
The incentives sought include Hybrid Annuity public private partnership (PPP) model under which the central government through its arms hold 70% stake, while the private player gets 30% during the construction stage.
“Given the due consideration of high investments and strategic nature of the project, it is appropriate to have the construction of marine works by authority which will increase the cash flow to concessioner as well as provide them with construction support,” suggestions from the private sector representatives reviewed by ET, said.
This project is significant for the country as nearly 75% of India’s transshipped cargo is handled at ports outside India. Colombo, Singapore, and Klang handle more than 85% of this cargo with Colombo Port alone handling 45 percent. According to official estimates, Indian ports can save $200-220 million each year on transshipment cargo if the Galathea projects comes about.
In January 2023, the Centre, through the Shyama Prasad Mookherjee Port, Kolkata, in association with Andaman and Nicobar Islands Integrated Development Corporation Limited, invited Expression of Interest to develop the International Container Transshipment Port in Galathea Bay. Ten participants responded and took part in consultations.
The participants were Adani Ports and Special Economic Zone, JSW Infra, Royal Boskalis Westminster, Rail Vikas Nigam, Container Corporation of India and Essar Ports, among others.
According to the participants, the government should be ready to bear the cost of construction while operation is to be left to the concessionaire. “This is needed to reduce the financial burden on the bidder. The government should be committed to invest major initial cost to kick start the project,” one of the interested companies said. Another demand is to have a Right of First Refusal for development of any other terminal for handing of similar cargo or other cargo at the proposed port. A tax holiday has also been sought to lower the port tariff.
