Railways and NHAI To Boost Vadhavan Port Connectivity With A $600 Million Rail/Road Project

The Indian Railways and the National Highways Authority of India will fund around USD 600 million for last-mile connectivity to the Vadhavan Port project. The latest arrangement will reduce the financial cost of the special purpose vehicle(SPV) led by Jawaharlal Nehru Port-Maharashtra Maritime Board which is executing the USD 9 billion project. Jawaharlal Nehru Port Authority holds a 74% stake in the Vadhavan Port JV while Maharashtra Maritime Board holds the remaining 26% stake.

Sanjay Sethi, Chairman of Jawaharlal Nehru Port Authority said that “The INR 76,220 crore project was to be funded to the extent of some INR 45,000 crores by the JNPA and MMB JV while the rest was to come from the private sector. Now there is a third category of funding which means that two government departments will take up INR 5000 crore worth of project components, which will lower our contributions to that extent.” 

Currently, the project is in pre-project implementation stage. The pre-project implementation involves activities like environment clearance, detailed engineering, and fundraising. Apart from this, the port project is designed to be the world's top ten container ports with a capacity to handle over 24.5 million twenty-foot equivalent units  (TEUs) by 2040.

How does the Vadhavan port project play a key role in India's maritime infrastructure?

The Vadhvan port project comes under the central government's ambitious SAGARMALA project (one of the ongoing mega infrastructure projects in India) which aims at capacity enhancement of all major ports. The program envisages unlocking the economic potential of India’s 4660-mile coastline. The total project cost is around USD 9 billion. Subsequently, The project will be developed in two phases under the landlord model, where both the public and private sector is involved. Vadhavan Port Project Ltd will invest USD 4.68 billion to create basic port infrastructure. In contrast, the private operators will invest around USD 4.4 billion for setting up container and multipurpose cargo terminals, coastal cargo berths RORO, and liquid berths. 
 

Vadhavan port is located 90 miles from Mumbai near Dahanu in Maharashtra’s Palghar district. Currently, Jawaharlal Nehru Port and Mumbai Port are the only two major ports in Maharashtra. Comparatively, both ports have been constrained in the evacuation of cargo for the past several decades due to shallow depths in the harbor which allows only small ships to berth. Vadhvan port can play a major role in alleviating these constraints as well as cater to the needs of the vast hinterland region covering the states of Maharashtra, Gujarat, Western parts of Madhya Pradesh, and North Indian states.

What is the role of NHAI and railways in this project?

National Highways Authority of India and Railways will provide last-mile connectivity to the port. Additionally, it will reduce the financial burden on the Jawaharlal Nehru Port Authority in developing the infrastructure necessary for the port. 
 

NHAI will construct a 34 km 8-lane highway which will provide last-mile road connectivity from Vadhvan to National Highway 8 (NH8). Indian railways will be required to construct 12 km long double rail lines connecting to New Palghar station. Besides the in-port rail yard, including equipment such as eRTGs, RMGCs, and rail operations within the port, They will be developed either by a Railway public sector undertaking (PSU) or offered to a private operator on a Public-Private-Partnership (PPP) which is estimated to cost around USD 368 million.

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