As one of India's premier ports, Jawaharlal Nehru Port Authority (JNPA) plays a pivotal role in the country's maritime trade. With the development of Vadhavan Port, which is poised to be a game-changer in maritime logistics, JNPA Chairman, Unmesh Sharad Wagh, IRS, provides invaluable perspectives on the vision, challenges, and transformative implications for the region's economy. In conversation with our correspondent Bhalchandra Chorghade, he promises to unravel key strategies, policies, and future projections, offering a comprehensive understanding of the Vadhavan Port's role in India's maritime landscape.
Excerpts from the interview:
What factors led JNPA to decide on constructing another port?
At present, India contributes to 2 percent of container traffic of the world. Though it seems to be a small number, but that 2 percent is more than 2 crores of containers annually. And we are talking about export and import. When we talk about container, it is basically an industrial product, may be raw material or finished product or intermediate. So, when we are a globalized economy, we are integrated to the global supply chain. When we export, we also import. And for industrialized nation, a container import is most important.
For that, we should have ports, not only for the coal and other things, but also for the containers. If you take the container export, we handle close to 2.2 million TEUs annually. JNPA’s capacity is utilized almost 85% of the total container capacity on the western side of the country that comprises of JNPA, Mundra and Pipavav Ports. If we have excess capacity in Paradip Port for containers, which is in the eastern part of India, it is of no use for the Punjab manufacturer due to heavy logistics cost to be incurred.
The distance to the gateway port, which provides door to the world, is important since the port should be closer to the manufacturing factory. In China, the distance between port and the manufacturing unit is 70 km (350 km maximum and 350 km minimum). In India, it is 350 km average and maximum 700 km. We already have a problem here, but our capacity utilization at present is around 80%, catering to the states of Maharashtra, Gujarat, North Goa, North Karnataka, Telangana, Punjab, Haryana, NCR, Western UP, Madhya Pradesh, Chhattisgarh et all. For this, we decided to have another port so that cargo from these states can be moved to the other parts of country in a cost-effective way.
Could you provide insights into the strategic importance of Vadhavan as a location for the new port?
In future, India's manufacturing will happen around Maharashtra and Gujarat due to its proximity to the existing JNPA and other ports. As far as southern India is concerned, the port situated there takes care of the cargo coming from surrounding states, but for northern India, it is for Maharashtra and Gujarat to handle. You cannot have a port below Mumbai since the distance increases and the mighty Sahyadris pose a huge problem for evacuation. You also cannot go towards Saurashtra as the distance and the draft is not there. Only draft available for the future is north of Vasai and south of Vapi. There are only five spots where you have a good draft which are all located in Palghar district.
And of these five, the nearest is Vadhavan. So, we don't have any area or spot to develop port for India's future which is as strategically and economically positioned as Vadhavan. For future demand, we require a huge port in next five years because JNPA’s is extended capacity is of 10.4 million TEUs which we will create in April. Once we achieve that, then we are full and there is no further chance of expansion. Mundra and Pipavav ports also cannot expand so we need to have Vadhavan Port that will handle the additional cargo.
What's the total cost for the port? Will there be any foreign funding or collaboration?
The port is a joint venture between JNPA and Maharashtra Maritime Board (MMB) with a ratio of 76:24. The total cost of the port is Rs 76,200 crores. While JNPA will invest Rs 40,000 Crore, the remaining cost will be borne by MMB. We already have the amount in bank that we need to invest. So, that is not an issue. As far as loan is concerned, people are more than ready to give. JNPA does not have any debt and has a steady cash flow for next 30 years. So, money is not a problem.
How many terminals will be there at Vadhavan Port?
The new port will have a total of 9 container terminals of 1 km each. There will also be 4 multipurpose terminals, 4 liquid terminals, 1 RoRo terminal and 1 terminal that we will give to the Coast Guard. All of these will be private terminals. We will do the basic set up and offer them on public private partnership (PPP) module.
How will business get allocated between four terminals at JNPA and those at Vadhavan?
We will be giving it on public private partnership (PPP) basis to the player on royalty per container module.
What will be the principal cargo focus of this port?
At Vadhavan Port, containers will be the focus.
JNPA's own terminal is less profitable than the ones run by others. Will this mean that you will also lease out the terminals of Vadhavan port?
Yes. We will be leasing out terminals at Vadhavan Port.
What is the approximate cost of each terminal being developed?
We will be applying the revenue sharing module. We will spend the total amount of Rs 76,220 crore which is needed for the basic infrastructure. The concessionaire of each terminal will have to spend Rs 25,000 Crore from their pocket.
Can you tell us about the timeline when the port will start operations?
The only last clearance is left is the cabinet clearance. The Ministry of Ports, Shipping and Waterways (MoPSW) has already moved a cabinet note. But It stopped because of the ensuing general elections. So, after the elections, once we receive the cabinet clearance, we will begin the construction. We have done all our homework and have started the process to acquire some forest land. We will immediately start once the clearance is achieved. So, by December, 2029, we should have the first ship there.
How does JNPT envision the Vadhavan port contributing to India's maritime trade infrastructure?
Vadhavan Port has become a crucial factor for India's growth story. It will increase GDP of Maharashtra by 2%. No country has grown in the past without its exim. Whether it is Japan after the second World War, then Southeast Asia or now in 90s through China. Every country’s growth is dependent upon its exim. It has become crucial for India's growth story.
What are the anticipated economic benefits of the Vadhavan port for the surrounding region and the nation as a whole?
Trade benefit is there. India will grow definitely. In next 30 years, India will become free from the burden that it doesn't have good port. The trans- shipment traffic that goes to Port of Jebel Ali and Colombo Port, will come to India. This way, India's economy will benefit with the reduction in logistics cost and extra income. Palghar will get lot of jobs. Maharashtra will get lot of industries. And the spin-off of it will contribute to the Maharashtra’s economy. India will gain, Maharashtra will gain, Palghar will gain and the overall economy will get a boost. It is only win-win situation for all.
What environmental measures JNPA has taken for Vadhavan Port?
We have got environmental clearance twice. The Dahanu Taluka Environment Protection Authority (DTEPA) was the first hurdle. They did all survey and asked us to do all the studies and we cleared that. Then it went to the Expert Advisory Committee (EAC) of the Ministry of Environment, Forests & Climate Change (MoEF&CC) where four expert bodies sit. They passed it and put on more than 40 conditions which we are complying with. There are some issues, but they are minimal.
What are the key features and capabilities that will distinguish Vadhavan Port from others.
First is it will have a 20-meter draft. Which means the largest vessel ever built will come to this. More than 24,000 TEU vessels, also called as Mother Vessels, can call on to this port for all 365 days. That is the biggest feature which is not there at present. Currently, the largest vessel called on Indian port to JNPA and Mundra in June, that is MSA Hamburg, which is 17,500 TEUs. So, this port will cater to more than that.
How does JNPA plan to integrate technology and innovation into the design and operation of the Vadhavan port?
The port will by incorporating the most advanced and latest technologies. The dredging that we will be doing will be by using the latest available technology. The break water that we are creating for the port, itself will be 10-km-long. We will for global tenders and select the best out of them to be our partners in development.
What collaborative efforts, if any, are being made with local communities and stakeholders to ensure their involvement and support for the Vadhavan port project?
We have already identified 27 skill sets that are required to get a job in the port. We have started imparting training to the people while more than 100 people have already been given employment. They will start once the port starts. Besides, we have also laid impetus on socio-economic development of the region by having schools, hospitals and other facilities. Stress will also be laid on promoting village tourism, dedicated fishing area, beach tourism, tribal art etc.
