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Shipping Ministry throwing its weight behind Vizhinjam box transhipment port

The Shipping Ministry is throwing its weight behind the under-construction container transhipment port at Vizhinjam in Kerala in a bid to raise the level of Indian cargo transhipped at local ports to over 75 per cent by 2030 from about 25 per cent.

Prioritising and extending development support to Vizhinjam port in a time-bound manner by 2023 forms part of the Maritime India Vision 2030 drafted by the Shipping Ministry.

Post stabilisation of Vizhinjam and techno-economic feasibility, the government can develop another transhipment port in Kanyakumari region by 2030, the Vision document said.

Currently, only 25 per cent of Indian cargo transshipment is handled by Indian ports resulting in $80-100 per twenty-foot equivalent unit (TEU) higher cost to exporters and importers for routing their containers through hub ports such as Colombo, Singapore and Jebel Ali.

Adani Ports and Special Economic Zone Ltd, India’s biggest private port operating company, was awarded the rights by the Kerala government to build and run the facility in a public tender in 2015 for 40 years and extendable by another 20 years.

A container transhipment port such as the one planned at Vizhinjam acts like a hub, into which smaller feeder vessels bring cargo which then gets loaded onto larger ships for transportation to final destinations. Larger vessels bring about economies of scale, and lower the cost of operations for shipping lines, which then translates into lower freight rates for exporters and importers.

Vizhinjam is being developed as a container transhipment port with an investment of ₹5,552 crore to compete with Colombo because its basic infrastructure such as deep draft and proximity to the main shipping lane is better than Colombo’s, which is the biggest transhipment facility in the region.

The project is entitled to receive a viability grant funding or VGF of ₹1,635 crore to be shared equally by the Central and State governments to boost its viability, making it the first port project to be offered such a grant.

The first phase of the Vizhinjam port will have an 800-metre long berth capable of handling One million twenty-foot equivalent units (TEUs). The berth length will be extended to 2 kms in three phases with a capacity to load 3 million TEUs.
Source: The Hindu Business Line

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