Strong Economic Case For A Transhipment Hub, Says Govt

PPP will be encouraged for this project via Landlord mode, Ministry of Ports, Shipping and Waterways today said.

NEW DELHI, Jan 27 (The CONNECT) – Working towards the Island Development programme announced by the Government, the Ministry of Ports, Shipping and Waterways, as part of the Holistic Development of Great Nicobar Island, has embarked on development of Mega International Container Transhipment Port (ICTP) at Galathea Bay of Great Nicobar Island of Andaman and Nicobar Islands in Bay of Bengal.

Other projects include, Airport, Township & and a Power plant. Holistic Development of Islands aims to bridge the gaps in infrastructure and improve economic opportunity for rapid increase in size for all types of vessels, from feeders to the large inter-continental carriers. 

The proposed infrastructures facilities shall be such that the service levels and facilities match with that of the global top container transhipment terminals and neighbouring ports, the Ministry of Ports, Shipping and Waterways today said.

The project focuses on three key drivers which can result in making it a leading container transhipment port such as strategic location in terms of proximity (40 nautical miles) with the International shipping trade route, availability of natural water depth of over 20m and carrying capacity of transhipment cargo from all the Ports in the proximity including Indian Ports.

Experts have long maintained that a strong economic case exists for enabling a transhipment hub in India that can attract Indian and regional transhipment traffic from the current hubs, save significant revenue loss, reduce logistics inefficiencies for Indian trade, reduce risks to the country’s export competitiveness and create an opportunity for India to become a large hub for Asia-Africa, Asia-US/Europe container traffic trade. Currently, nearly 75% of India’s transhipped cargo is handled at ports outside India. Colombo, Singapore and Klang handle more than 85% of this cargo with 45% of this cargo handled at Colombo Port. Indian ports can save $200-220 Million each year on transhipment cargo. Also, developing Galathea Bay Transhipment Port will accrue significant benefits such as forex savings, foreign direct investment, increased economic activity at other Indian Ports, enhanced logistics infrastructure and thus, efficiencies, employment generation, and increased revenue share.

Several other allied businesses viz. ship chandlery-ship supplies, ship repair, crew change facility, logistics value added services, warehousing and bunkering also planned at this Transhipment Port. Additionally, there is a potential of creation of around 1700-4000 incremental direct jobs by end of this project.

The proposed facility is envisaged to be developed in four phases with the total estimated cost of ~INR 41,000 crore. Phase 1 proposed to be commissioned in the year 2028 with handling capacity of ~ 4 Million TEUs, increasing to 16 Million TEUs in the ultimate stage of development. The estimated cost for Phase 1 of the proposed transhipment port is around INR 18,000 crore which includes the construction of breakwaters, dredging, reclamation, berths, storage areas, building and utilities, procurement and installation of equipment and development of port colony with core infrastructure is going to be developed with the government support.

Public Private Partnership (PPP) will be encouraged for this project via Landlord mode. The PPP Concessionaire shall have the flexibility to develop storage area, container handling equipment and other infrastructure based on concessionaire’s own market and business assessment subject to the Minimum Guaranteed Traffic. The Concessionaire would be awarded a long-term PPP concession of 30 to 50 years (based on requirement), shall be responsible for the provision(s) of port services and shall have the rights to levy, collect and retain charges from port users.

Expressing his happiness on this milestone of MoPSW, the Union Minister of Ports, Shipping and Waterways and AYUSH, Shri Sarbananda Sonowal said that “this project will be a major landmark in developing India to become a self-assured and self-reliant Nation and will support the economic development of the country. Ministry of Ports, Shipping and Waterways is continuously striving to fulfil the grand vision of making a new India as envisaged by our visionary Prime Minister Shri Narendra Modi ji.”

Syama Prasad Mookerjee Port, Kolkata (SMPK), on behalf of MoPSW is the nodal agency for implementation of this project and will be inviting Expression of Interests from the interested organizations having relevant technical expertise, financial capacity and operational experience required for development, operations, maintenance and profitable growth of the proposed project.

The EOI pertaining to ICTP, Galathea Bay will be available here from January 28, 2023.  All other details, including date of submission, extension, clarifications amendment etc. will be updated on above websites from time to time.