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India OKs Greenfield, Deep-sea Transshipment Hub at Colachel

Posted on July 7, 2016

Aiming to regain some of its gateway cargo transshipped via international hub ports, especially Sri Lanka’s Colombo, the government of India on Tuesday approved construction of the much-awaited greenfield deep-sea port at Enayam near Colachel in Tamil Nadu.

“Currently, all of India’s transshipment traffic gets handled in Colombo, Singapore and other international ports. The Indian port industry loses out up to Rs. 1,500 crore (about $230 million) of revenues each year,” the government said.

The government hopes the port will become a major transshipment hub on the global east-west trade route and it is expected that the project will be a dedicated container facility.

The announcement follows on the heels of reporting that the Ministry of Shipping was close to approaching the union cabinet for the project’s approval.

The statement said a special-purpose company based on equity participation from the ports of V.O. Chidambaranar Port Trust, or Tuticorin, Kamarajar Port Trust, or Ennore, and Chennai Port Trust will be set up to handle the port development. The joint entity will be responsible projects such as dredging, land reclamation, breakwaters and hinterland connectivity links.

Feasibility studies undertaken by the ministry showed the new port site has a 20-meter (66 feet) natural water depth that can accommodate the latest generation of mega-ships.

“At present, there are only a few ports in India that have sufficient draft and can match global cargo handling efficiencies,” the government said.

The project, which is reported to require a total investment of Rs. 27,500 crore for a three-phase development, is part of the Narendra Modi-led government’s mammoth “Sagarmala” port-led development program. Provisional plans for the first phase call for the construction of two berths that each have a 400-meter quay, and a total capacity of 1.6 million twenty-foot-equivalent units per year, sources told

Authorities are hoping that Enayam will help substantially reduce logistics costs for South Indian shippers who largely rely on transshipment at Colombo for mainline shipping connections.

Port statistics compiled by show Colombo handled roughly 1.3 million TEUs of Indian transhipment cargo in fiscal year 2014 to 2015, which ended March 31, up from 652,000 TEUs the prior year. Colombo enjoyed the largest share of India’s foreign transhipment volumes during that year, accounting for 48 percent, followed by Singapore, at 22 percent, and Port Klang, at 10 percent, according to the data.

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