Greenfield Ports: Recent developments and initiatives

With a coastline of more than 7,517 km, the port sector in India is driven by the flourishing growth in external trade. The development of greenfield ports in the country has been driven by a number of factors, including the need to enhance supply chain efficiency, reduce transportation costs and provide the much-needed infrastructure to support economic growth. The government has been actively supporting the development of greenfield ports through a range of policies and initiatives, including the Sagarmala project, which aims to modernise and upgrade the country’s ports and shipping infrastructure, with a capital outlay of Rs 8 trillion for the period 2015-35.

Recent developments in greenfield ports

The sharp increase in cargo volume and severe congestion at major ports have prompted sta­tes to work on developing greenfield ports in the country. With the aim of expediting and bo­osting economic activity in Karnataka, the sta­te, on February 17, 2023, announced a proposal to develop two all-weather greenfield deep ports in Uttara Kannada district under public-private partnership (PPP). While the port at Keni, near Ankola, would be designed to handle 30 million tonnes per annum (mtpa) of car­go, the one proposed at Pavinakurve in Hon­navara taluk would be equipped to handle 14 mtpa. JSW Infrastructure Limited was the sole bidder for the development of the greenfield port at Keni.

Banking on the strategic locational advantages, combined with a coastline of 950 km, the West Bengal government has approved the development of Tajpur deep sea port. In Sep­tember 2022, Adani Ports and Special Econo­mic Zone (APSEZ) was selected to develop Taj­pur port at a total investment of Rs 250 billion, of which Rs 150 billion is to be allocated for port development while the remaining amou­nt will go towards building related infrastructure. The West Bengal government issued a letter of intent (LoI) to APSEZ for the project on October 12, 2022, following which, APSEZ has formed a wholly owned subsidiary, Tajpur Sa­gar Port Li­mi­ted, for further operations.

To further realise the potential of Andhra Pradesh’s 974 km long coastline, the state has embarked on the development of three greenfield ports including ports at Ramayapatnam, Machilipatnam and Bhavanapadu. These ports are expected to commence operations in 2023, creating an additional capacity of at least 100 million tonnes of cargo. As of March 2023, the Ministry of the Environment, Forest and Climate Ch­an­ge (MoEFCC) has recommended amend­me­nts in Environmental Clearance and Coastal Regulation Zone Clearance for the Ramayapat­nam port project. On February 8, 2023, the An­­d­hra Pradesh cabinet approved the grant of bank guarantee for availing a loan worth Rs 39.4 bi­lli­on for the Machilipatnam greenfield port project from Power Finance Corporation Limited. Meanwhile, the joint venture of Hyderabad-ba­sed Vishwa Samudra Holdings Private Limited and R.R. Constructions has won a Rs 29.49 billion engineering, procurement and cons­truc­tion contract from the state for a new port at Bha­vanapadu in Srikakulam district.

In an effort to accelerate the pace of port development, the Maharashtra government is also planning to develop two new deepwater gr­eenfield ports in the Konkan region. The Maha­rashtra Maritime Board on March 16, 2023 in­vited feasibility study tenders for the development and identification of coastal areas near Vijaydurg and Ganeshgule, in Sindhudurg and Ratnagiri districts respectively.

Challenges and the way forward

Port productivity and efficiency largely depend upon the quality and reliability of road and rail connectivity, and adequate storage and handling facilities. The inadequacy of expressway co­nnectivity between upcoming ports, and the high fuel cost make port transportation inefficient and slow. The turnaround time at ports in India, therefore, remains abysmal. Despite the­se challenges, the development of India’s new greenfield ports is a positive development for the country’s economy and is expected to bring significant benefits in terms of improved supply chain efficiency, reduced transportation costs and increased trade and commerce. How­ever, it is critical that these ports are developed in a sustainable and socially responsible manner, providing long-term benefits to the In­dian economy and its people.