JSW Jaigarh Port: Expansion under way, backed by strong performance

Expansion under way, backed by strong performance

Inaugurated in August 2009, Jaigarh port is the first deepwater, all-weather, 24×7 private port in Maharashtra. This greenfield port occupies a strategic location on the west coast, as it is situated between the ports of Mumbai and Goa. It is operated by JSW Jaigarh Port Limited (JSWJPL), a special purpose vehicle (SPV) incorporated by JSW Infrastructure Limited to develop the port, on a build-own-operate-share-transfer basis, under a 50-year concession licensed by the Maharashtra government.

JSW Jaigarh port started operations in 2009 by handling vessels bringing in imported coal for JSW Energy’s thermal power plant located at Jaigarh. In the past eight years of operations, it has become one of the fastest growing private ports on the west coast and has consistently reported growth in terms of both cargo traffic and capacity.

At present, the port is fully operational with five berths, which have a cargo handling capacity of 50 million tonnes per annum (mtpa) (as of December 2017). The port is capable of offering customised services for handling dry bulk, and liquid, roll on, roll off, break bulk and container cargo, as well as a range of support services.

Operational performance

The port handles varied cargo such as coal, iron ore, coke and molasses. From 2010-11 (the first full year of operations) to 2016-17, total cargo traffic at the port increased at a compound annual growth rate (CAGR) of 78.81 per cent. In particular, cargo traffic at the port has been increasing significantly since 2014-15, with 2015-16 being an exception. During 2016-17, the port handled 12.38 million tonnes (mt) of cargo, registering a 49.16 per cent growth over 2015-16. Of the traffic handled during 2016-17, overseas and coastal traffic accounted for 8.41 mt (68 per cent) and 3.97 mt (32 per cent) respectively.

Overall, the share of coastal traffic in the total traffic handled has been increasing in light of the increased impetus received by this segment. Coastal traffic share increased from 8.11 per cent in 2012-13 to 32.07 per cent in 2016-17. During 2017-18 (April-December 2017), the share of coastal traffic in the total traffic handled at the port stood at 31.46 per cent. One of the reasons for the increase in the share of coastal cargo is the scheme for incentivising a modal shift in cargo movement launched by the Ministry of Shipping (MoS) in March 2016. The scheme provides monetary incentives for moving cargo through coastal and inland waterway networks.

Dry cargo traffic (comprising coal and iron ore) at the port increased at a CAGR of 16.41 per cent from 2012-13 to 2016-17, primarily due to a sharp increase in imports. In 2016-17, dry cargo imports stood at 11.73 mt compared to 6.39 mt in 2012-13 and during 2017-18 (April-December 2017) it stood at 9.08 mt.

Under dry cargo, iron ore accounted for the maximum share of 55.19 per cent (6.47 mt in 2016-17). Of this, overseas cargo accounted for 3.35 mt (51.69 per cent) and coastal cargo for 3.13 mt (48.31 per cent). Iron ore is followed by coal at 42.5 per cent (5.26 mt in 2016-17). Of the total coal traffic, overseas cargo accounted for 4.42 mt (84.13 per cent) and coastal cargo for 0.83 mt (15.87 per cent).

Jaigarh port has been constantly focusing on increasing its competitive advantage and handling bigger vessels. It is the first port on the coast of Maharashtra to handle a Capesize vessel. The 200,000 deadweight tonnage Capesize vessel, MV Indian Friendship, arrived at the port on April 17, 2015 carrying 168,000 tonnes of steam coal for JSW Energy. The port handled 47 Capesize vessels during 2017-18 (April-December 2017).

Ongoing and upcoming projects

Jaigarh port is undertaking several projects to augment capacity. At present, there are projects worth over Rs 35 billion on the anvil. These relate to the construction of a shipyard, improving connectivity to the port (road and rail), etc. To this end, the port is undertaking the implementation of the 103 km long Chiplun-Karad rail connectivity project. The project, which is scheduled to be completed by 2020-21, has been sanctioned by the Ministry of Railways (MoR) and is estimated to entail an investment of Rs 31.95 billion.

In addition, construction work on three projects involving an investment of more than Rs 14 billion is presently under way. These are the laying of a new line from Digni-Jaigarh port, the construction of berths 3A and 4A and Phase II mechanisation of the port.

Of these, the biggest project in terms of the investment involved is the construction of a 33.7 km new rail line connecting Digni and the port. The project is being jointly developed by JSWJPL, Konkan Railway Corporation Limited (KRCL) and the Maharashtra Maritime Board (MMB) at a cost of Rs 7.71 billion. The project is expected to play a critical role in transporting bulk commodities from Jaigarh port to Konkan Railway for further onward movement to the hinterland. The concession agreement for the project was signed in June 2015 and an SPV – Jaigarh Digni Rail Limited – has been incorporated among JSWJPL, KRCL and MMB with a 63 per cent, 26 per cent and 11 per cent stakeholding respectively. Construction work on the project is presently in progress and is scheduled to be completed by September 2019.

Another major project being implemented is the Phase II mechanisation of the port. Being implemented at an investment of Rs 4.46 billion, the project is expected to add a capacity of 15 mtpa to the port. As part of the project, two ship unloaders have been installed, of which one is already operational.

Future plans

JSW Infrastructure is planning to invest funds totalling Rs 51 billion by 2020 for capacity expansion at the port. The funds will be spent on increasing the cargo handling capacity at Jaigarh port to 200 mt by 2020. Earlier, in 2015, the company had devised a Rs 100 billion five-year plan for capacity expansion. This plan was later optimised to Rs 88 billion, of which Rs 37 billion had already been spent till June 2018.

The port also aims to take advantage of its proximity to transshipment hubs in the Gulf such as the Salalah and Jebel Ali ports. It has a multimodal and transshipment model under execution, and in line with its strategy, Jaigarh port has acquired some of the largest sea vessels in India. These vessels are currently under trial sailing. In fact, the port has a readily available transshipment cargo of 10-30 mt offered by JSW Steel at Dolvi.

In line with the expansion plans, H-Energy Gateway Private Limited inaugurated the country’s first floating storage regasification unit (FSRU)-based liquefied natural gas (LNG) terminal at the port in May 2018. The terminal will offer storage, regasification, reloading, fuel bunkering and truck loading facilities to cater to the growing energy demand of Indian industries. The FSRU-based terminal is being developed in accordance with world-class engineering and safety standards and will have a capacity of 4 mtpa. It is expected to be operational by the fourth quarter of 2018. Once operational, the terminal will supply regasified LNG to customers through a 60 km tie-in pipeline which will be connected to the national gas grid at Dabhol.

To conclude, given the pace of growth, Jaigarh port has the potential to become one of the largest ports on the west coast. Going forward, timely completion of the projects that are currently under way will be crucial for those plans to fructify.

Garima Arora