Sajjan Jindal-led JSW Group is looking to set up a captive port at Pavinkurve in Karnataka’s Honnavar taluk with an investment of ₹2,000 crore. The port will meet the demand for its Vijayanagar steel plant, which is being expanded to 18 million tonnes (mt) from 12 mt, a company official has said.

“We have submitted a proposal, including a detailed project report, to the Karnataka government for setting up a captive port at Pavinkurve with a capacity to handle 15 mt of cargo,” a JSW Group official said, asking not to be named.

Swiss challenge mode

A spokesman for Karnataka’s Ports Department confirmed receiving the proposal from JSW Group. “We will scrutinise the proposal and implement the port project through the Swiss Challenge mode,” he said.

Under the Swiss Challenge method for suo motu proposals such as the one filed by the JSW Group, the State government will call for competing counter offers.

JSW will shall have the right of first refusal to match the highest bid submitted in the tender and develop the port.

“The entire 15 mt of cargo for the port will come from JSW only. There is no other cargo. It’s unlikely that anyone else will participate in the Swiss Challenge,” the JSW official said.

A new port is key to JSW’s plan to expand the capacity of Vijayanagar steel plant – India’s largest single location steel producing facility.

Even the new port will only partially meet the requirements of the expanded Vijayanagar plant.

Port facilities

Currently, JSW is meeting the logistics needs of the steel plant through two multi-purpose berths run by South West Port Ltd, a subsidiary at Mormugao Port in Goa.

At 4 lakh tonnes per month, South West Port is able to handle only 3.6 mt of coal a year or half the requirement of the steel plant. JSW is meeting the balance requirements through a terminal run by the Adani Group at Mormugao Port and partly through New Mangalore Port and privately-run Krishnapatnam port.

Having port facilities to handle in-house cargo will help JSW cut dependence on third parties in a business where logistics is a big and critical component.