Maharashtra will get another huge port built at a cost of around Rs 65,545 crore at Wadhawan, near Dahanu in Palghar district on the Gujarat border, catapulting India among countries with top 10 container ports in the world, an official said here on Wednesday.

The proposal to create the huge port – on a ‘landlord model’ – was cleared at a Union Cabinet meeting chaired by Prime Minister Narendra Modi on Wednesday.

Maharashtra has two major ports i.e. Mumbai and JNPT which cater to the hinterland of Maharashtra, including NCR, Punjab, Rajasthan and UP. Out of these ports, Mumbai port has constraint in the evacuation of cargo for the past several decades due to development of the city around it also due to availability of limited depths in the harbour. JNPT was basically developed as a satellite port of Mumbai port and has coped up well in becoming the largest container port of the country.

The development of 4th container terminal is underway and after its full development, there is little space for further expansion. Apart from that due to the presence of bedrock at or very close to the existing bed level JNPT cannot be deepened further economically to handle the future generation of mega container ships drawing draft of 16 m or more.

With the projected demand for containers to go up, it is necessary to locate a new mega port site which can cater to the increased requirement of capacity and also could be developed to handle the future deep-draft ships. Considering the above had been decided to develop Vadhavan port as a satellite port for JNPT.

The port is assumed to cater to spillover traffic from JNPT port once its expanded capacity of 10 million TEUs is fully utilized. However, since Vadhavan is closer to South Gujarat, parts of Madhya Pradesh (e.g., Vapi, Surat, Ahmedabad, Indore) as compared to JNPT, it will attract a part of the total traffic from these hinterlands even before JNPT reaches full capacity utilization. Based on the above, Wadhawan is expected to handle ~0.8 MTEUs in its first year of operation (FY23).

TEU stands for Twenty-Foot Equivalent Unit which can be used to measure a ship’s cargo-carrying capacity. The dimensions of one TEU are equal to that of a standard 20′ shipping container. The world’s largest container ships can carry in excess of 14,000 TEUs.

The proposed port could be used as a gateway port for the import and export of cargo for Tarapur industrial area. The cargoes that are likely to be handled at the port are steel rods, steel coils, scrap etc. In addition, in order to cater to the power demand of the state, Vadhavan might handle coal for coastal power complex of 2.5 GW to be constructed in three phases starting FY25.

The traffic for the Vadhavan port is projected to be around 15 MTPA in 2023 increasing to around 254 MTPA in 2038 (million metric tonnes per annum).

The capital cost of overall port development up to the master plan phase is expected to be INR 29,860 crores. The capital cost for Phase 1 development is expected to be INR 9,297 crores. The major exclusions in cost estimates are the cost of land acquisition for Rail/Road Corridors, Port craft, Financing and Interest Costs.

The development of the port will have an impact on the connectivity of the region as well. As of now, the existing western railway mainline is 10km away from Vadhavan Point. Nearest railway station to Wadhawan Point is Dahanu which is approximately 10.5km and Vangaon railway station is approximately 12km from Vadhavan Point.

The logistics industry moving freight through roads also stands to benefit from this port. NH-8, which is a 4-lane National Highway connecting Mumbai and Delhi, is approximately 28km away from the proposed port location. Wadhawan site can be reached via Boisar through Boisar road then Boisar-Tarapur road. This road passes through the dense habitation in Boisar. Other two options to reach Vadhavan are Kasa junction on NH-8 then – Dahanu-Jewhar road and Kasa Junction then – Chinchani-Vangaon road via Chinchani.

About the traffic, the Wadhawan port will also cater to the same hinterland as JNPT – however, JNPT will have an advantage given its existing trade network. Historically it has been found that such infrastructure tends to be quite sticky. Therefore it has been assumed that Vadhavan will mainly cater to spillover traffic from JNPT once the latter is saturated. The total traffic capacity at JNPT has been assumed to be 10 MTEUs per annum after the ongoing expansions.

It is envisaged that during the operation stage impacts are mostly positive in nature. Once the project is operational, the project has several benefits to the immediate affected community and society in large.

The following positive impacts envisaged from the Wadhawan project: Employment generation for locals, Development of road and rail connectivity, Business opportunity due to ware-housing, cargo handling (stevedoring), and other transport requirements.

Once operational, the Wadhawan port will complement the development of the Western Dedicated Freight Corridor

(WDFC). Even though the WDFC ends at the JNPT, the connectivity to the newly developed Wadhawan port will be critical to the logistics sector, and thus, the overall economics of the hinterland.

The Wadhawan port is also critical if viewed in the context of the Sagarmala project.

The Sagarmala initiative is one of the most important strategic imperatives to realize India’s economic aspirations. The overall objective of the project is to evolve a model of port-led development, whereby Indian ports become a major contributor to the country’s GDP.

The Sagarmala project envisages transforming existing ports into modern world-class ports and developing new top-notch ports based on the requirement. It also aspires to efficiently integrate ports with industrial clusters, the hinterland and the evacuation systems, through road, rail, inland and coastal waterways. This would enable ports to drive economic activity in coastal areas.

Further, Sagarmala aims to develop coastal and inland shipping as a major mode of transport for the carriage of goods along with the coastal and riverine economic centres. As an outcome, it would offer efficient and seamless evacuation of cargo for both the EXIM and domestic sectors, thereby reducing logistics costs with ports becoming a larger economy.