Centre approves development of a container terminal in Kandla Port

The Union Cabinet committee on economic affairs on Wednesday approved the development of a container terminal at Tuna-Tekra in Deendayal Port (Kandla Port) at an estimated cost of Rs 4,244 crore.

The project will be built in public private partnership (PPP) mode. Under the build operate transfer (BoT) mode, the project cost will be borne by the concessionaire and an estimated cost of common user facilities of Rs 296.20 crore will be on the part of the concessioning authority, a statement by the Cabinet said.

“On commissioning of the project, it shall cater to the future growth in container cargo traffic. From 2025, a net gap of 1.88 million twenty-foot equivalent units (TEUs) shall be available which can be catered by a state-of-the-art container terminal at Tuna-Tekra, which will give it a strategic advantage as it will be the closest container terminal serving the vast hinterland of northern part of India. Besides increasing the business potential of Kandla, the project will boost the economy and generate employment,” the Centre said.

The technical qualification for the project has already taken place, the tender for which was floated in July. The project, with a 30-year concession period consists of construction of an off-shore berthing structure for handling three vessels at a time with allied facilities and handling capacity of 2.19 million TEUs per annum.

In the previous financial year, Kandla Port handled 127 million tonnes (mt) of cargo, and is one of the busiest among the 12 major ports in the country. The project is being undertaken in anticipation of cargo growth in the coming years as foreign trade picks up, and the location is attractive to major logistics and infrastructure companies, indicating a competitive financial bidding scenario, said a ministry official.

The port primarily services cargo bound to and from northern India, including the land-locked states of Jammu and Kashmir, Uttar Pradesh, Madhya Pradesh and Rajasthan. It also faces stiff competition from nearby ports in Mundra, owned by Adani Ports and Special Economic Zones, and Pipavav Port, owned by the AP Moller-Maersk Group.

With the container terminal, the Centre intends to make Kandla Port competitive against its private peers, which have been growing at a rapid pace, especially since the pandemic.