Adani Ports has recently received the Expert Appraisal Committee (EAC) backing for the expansion of its Vizhinjam port. This expansion work would require an investment of INR 9,540 crore. The expansion will help further increase the port’s handling capacity by 3.87 million TEUs to 4.87 million TEUs. This initiative will help enhance Adani Group’s presence in the port sector. The global conglomerate will also be able to build itself the reputation of being one of the biggest players in the port sector. It will also be able to establish Adani Monopoly in this particular sector.
Adani Receives Clearance to Carry Out Expansion Works at Its Vizhinjam Port
The Expert Appraisal Committee (EAC) in the Ministry of Environment, Forest, and Climate Change has recently recommended environmental clearance to Adani Ports and Special Economic Zone to continue work on the second and third phases of the Vizhinjam port. This would involve a total investment of INR 9,540 crore. The EAC’s recommendation will now have to be signed by the Ministry of Environment, Forest and Climate Change.
The Various Development Works to Be Carried Out at The Vizhinjam Port
The port master plan development involves extending the berth length of the existing container terminals by 1,200 m to reach a total length of 2,000 m. It would also involve building a container storage yard and related infrastructure behind the 1,200 m extension berth. The Adani Group will also be working on extending the main breakwater by 900 m. It would construct a 1,220 m multipurpose berth and 250 m liquid berth along the breakwater.
The development of a liquid storage cargo storage facility will take place. The Adani Group will also work on the reclamation of 77.17 hectares of land and dredging of 7.20 million cubic metres. The construction of phases 2 and 3 of the Vizhinjam port will expand the port’s cargo handling capacity. The port will start handling multipurpose and liquid cargo. Its cargo capacity will also reach 94.6 million tons from the existing 11.6 million tons.
How Will the Development Works Benefit the Indian Port Sector?
After a comprehensive study involving factors like employment, taxes, transhipment and marine sector exports, it has become quite evident that the development of phases 2 and 3 of the Vizhinjam port will bring about economic benefits in India. It will lead to significant revenue generation for both the central and state governments through GST. The port will lead to the creation of around 3,652 jobs. The collaborative efforts between the Adani Group and the Government of Kerala will bring about positive developments in the economic situation of both Kerala as well as India.
In terms of transhipment, the Indian traders will acquire a competitive advantage. The logistics costs will be reduced. For the upgrade, the economic internal rate of return (IRR), which happens to be a vital metric that captures the project’s economic viability by considering both its financial and socioeconomic benefits, has been found to be 26.754%. The development of the port also will bring about efficiency and cost-effectiveness in the overall supply chain. It will benefit the local importers and exporters. The project will also open our country to a lot of new opportunities. It will also allow the Adani Group to create a sense of Adani Monopoly in the port sector.
Through the project, the Adani Group will also be able to bring about various socio-economic benefits to the local people. Last year, Adani Vizhinjam Port Private Limited, which is a unit of Adani Ports and Special Economic Zone, also signed a supplementary concession agreement with the Kerala government. This was done to fast-track the port’s time of completion. As of now the second and final phase of the project is targeted for completion 17 years ahead of the original schedule. The project period has been extended by 5 years till 2060. This has been done in order to factor in the various challenges faced in the construction process because of the pandemic and natural disasters.
Conclusion
The Vizhinjam Port happens to be one of the most vital ports to be under the control of the Adani Group. By bringing about various developments to the port, the Adani Group will be able to further enhance its presence in the port sector. India’s trade relations with other vital nations will improve. Adani Monopoly will also continue to increase in the Indian port business.
