Indian Railways, NHAI boost funding for Vadhavan Mega Port Project

10 Oct 2023 CW Team

Additionally, the in-port rail yard, including essential equipment like eRTGs, RMGCs, and rail operations within the port, costing approximately Rs 30.71 billion, will be developed by a Railway public sector undertaking or offered to a private rail operator on a public-private partnership (PPP) basis.

This collaboration between the Ministry of Railways and NHAI provides a third source of funding for the port project, designed to propel India into the world?s top 10 container ports, with a capacity to handle over 24.5 million twenty-foot equivalent units (TEUs), a capacity not achievable by other Indian ports due to natural limitations.

Previously, Vadhavan Port Project (VPPL), a joint venture between the state-owned Jawaharlal Nehru Port Authority (74% stake) and Maharashtra Maritime Board (26% equity), was tasked with funding the rail and road connectivity to the port and the in-port rail yard.

Currently, the project is in the pre-project implementation stage, involving activities such as environmental clearance, detailed engineering, and fundraising. The proposal has been submitted to the Public Investment Board (PIB) for scrutiny by the Finance Ministry before it goes to the Union Cabinet for final clearance. The Union Cabinet had given in-principle approval for the project in January 2020.

Notably, the rail connectivity up to the port will be handled by Indian Railways, and the rail yard inside the port has been identified as a PPP project. This development not only reduces the financial burden on the port authority but also opens avenues for private investment, marking a significant step in modernising Indian ports.

Furthermore, changes in the port layout have reduced the Coastal Regulation Zone (CRZ) 1A requirements, enabling the project to progress smoothly. The Dahanu Taluka Environment Protection Authority (DTEPA) has issued a no objection certificate for the project. Additionally, efforts are being made to address the sensitive issue of fishermen?s compensation, ensuring that the project positively impacts the local community.

The mega port planned by the Indian government at Vadhavan near Dahanu in Maharashtra?s Palghar district is set to receive financial support from the Indian Railways and the National Highways Authority of India (NHAI). These entities will provide separate funding for the last mile rail and road links, estimated to cost around Rs 50 billion. This move aims to alleviate the financial burden on the special purpose vehicle led by the Jawaharlal Nehru Port Authority, which is responsible for executing the Rs 762.2 billion project. Additionally, the in-port rail yard, including essential equipment like eRTGs, RMGCs, and rail operations within the port, costing approximately Rs 30.71 billion, will be developed by a Railway public sector undertaking or offered to a private rail operator on a public-private partnership (PPP) basis. This collaboration between the Ministry of Railways and NHAI provides a third source of funding for the port project, designed to propel India into the world?s top 10 container ports, with a capacity to handle over 24.5 million twenty-foot equivalent units (TEUs), a capacity not achievable by other Indian ports due to natural limitations. Previously, Vadhavan Port Project (VPPL), a joint venture between the state-owned Jawaharlal Nehru Port Authority (74% stake) and Maharashtra Maritime Board (26% equity), was tasked with funding the rail and road connectivity to the port and the in-port rail yard. Currently, the project is in the pre-project implementation stage, involving activities such as environmental clearance, detailed engineering, and fundraising. The proposal has been submitted to the Public Investment Board (PIB) for scrutiny by the Finance Ministry before it goes to the Union Cabinet for final clearance. The Union Cabinet had given in-principle approval for the project in January 2020. Notably, the rail connectivity up to the port will be handled by Indian Railways, and the rail yard inside the port has been identified as a PPP project. This development not only reduces the financial burden on the port authority but also opens avenues for private investment, marking a significant step in modernising Indian ports. Furthermore, changes in the port layout have reduced the Coastal Regulation Zone (CRZ) 1A requirements, enabling the project to progress smoothly. The Dahanu Taluka Environment Protection Authority (DTEPA) has issued a no objection certificate for the project. Additionally, efforts are being made to address the sensitive issue of fishermen?s compensation, ensuring that the project positively impacts the local community.