VARDHVAN PORT

02.09.2024

VARDHVAN PORT

IN NEWS –

The Vardhavan port project, recently approved by the Union Cabinet, marks a significant development for India’s maritime infrastructure. Located in Dahanu, Maharashtra, it will be the country’s first major port since JNPA, commissioned in 1989, and will address longstanding challenges faced by Indian ports due to geographical limitations.

In India, no new major government-run ports have been established in over 50 years, although the private sector port at Mundra was commissioned 25 years ago. Presently, there are initiatives to upgrade Deendayal and Paradip ports into mega ports, with plans also set for a mega port at Galathea Bay in the Nicobar Islands.

• The Vadhavan port will be constructed through a Special Purpose Vehicle (SPV) formed by the Jawaharlal Nehru Port Authority and the Maharashtra Maritime Board.
• It will be an all-weather Greenfield deep draft major port in Palghar District, aligned with the PM Gati Shakti program, and built on a landlord-model through PPP.

KEY FEATURES

1. Greenfield Infrastructure: Developed on previously undeveloped land from scratch.
2. Construction: To be built in 2 phases with a total capacity of 23.2 million TEUs and a 20-meter draft to handle mega vessels.
3. Landlord Model: The Port authority acts as a regulatory body and landlord, with private companies managing operations.

ECONOMICS SIGNIFICANCE

1. Mega Port Status: India’s first true mega port with 300+ MMTPA capacity.
2. Lower freight costs per unit due to larger volumes.
3. Ability to handle diverse cargo types beyond dry and bulk goods.
4. Promotes economies of agglomeration by hosting suppliers, industrial complexes, and logistics firms.
5. Competition among operators reduces handling charges.
6. Functions as a hub in a hub-and-spoke model, managing global traffic and distributing cargo to smaller ports.

Trade implications:

1. Potential to handle projected sea-based EXIM trade of $1.6-2 trillion by 2030.
2. Could reduce dependence on foreign ports for transhipment. 

Strategic importance: It is crucial node for IMEEC (India-Middle East-Europe Economic Corridor) and INSTC (International North-South Transport Corridor).