In its second meeting under the Narendra Modi government’s third term, the Union Cabinet on Wednesday approved the Rs 76,220 crore Vadhavan Port project in Maharashtra. This decision followed months of deliberations, marking it as one of the largest port projects in India. The Vadhavan Port is anticipated to serve as a pivotal link for the India-Middle East-Europe Corridor (IMEC) and the International North-South Transportation Corridor (INSTC), bolstering India’s trade networks and international economic standing. The project will handle up to 298 million metric tons (MMT) every year, potentially making the port one of the top 10 busiest ports globally.
Cabinet approves Development of an all-weather Greenfield deep-draft Major Port at Vadhavan in Maharashtra
The total project cost is ₹76,220 Crore. The Project will create a cumulative capacity of 298 million metric tons (MMT) per annum
Vadhavan Port Project will have the… pic.twitter.com/LoQtGgYnS7
— PIB India (@PIB_India) June 19, 2024
The Vadhavan Port will be built by Vadhavan Port Project Limited (VPPL), a joint effort of Jawaharlal Nehru Port Authority (JNPA) and Maharashtra Maritime Board (MMB) holding 74 percent and 26 percent shares respectively. It will be a modern port with advanced facilities, and promote partnerships between the public and private sectors. This port will use modern technologies to manage mainline mega vessels linking Asia, Europe, the Middle East, Africa, and the Americas.
The project will cover the cost of building basic infrastructure, terminals, and other business facilities through a public-private partnership. Along with this, the Cabinet has also approved the construction of roads that will link the port to national highways by the Ministry of Road Transport & Highways under Sh. Nitin Gadkari. Furthermore, the Ministry of Railways will connect the port to the current railway network and the upcoming Dedicated Rail Freight Corridor. Once finished, Vadhavan Port is expected to rank among the world’s top 10 ports as mentioned above.
With an estimated government investment of Rs 38,000 crore and an equal contribution expected from private-sector players, Vadhavan Port is anticipated to rank among the top 10 ports globally upon completion. The project faced delays because of environmental concerns. The government is taking steps to lessen its impact on local communities and the environment.
In addition to the port project, the Union Cabinet has approved a Viability Gap Funding (VGF) of Rs 7,453 crore to kickstart the nation’s first offshore wind power projects. This substantial funding allocation includes Rs 6,853 crore earmarked for the installation and commissioning of 1 gigawatt (GW) of offshore wind energy projects 500 megawatts (MW) each off the coasts of Gujarat and Tamil Nadu. Additionally, Rs 600 crore has been allocated for upgrading two ports to support the logistical requirements of these projects.
Furthermore, the Cabinet approved India’s initial offshore wind power projects with a Rs 7,453 crore funding plan. They also raised the minimum support price (MSP) for kharif crops by 5 to 12.7 percent. Prime Minister Narendra Modi posted on twitter that Cabinet decision to build a major port in Vadhavan, Maharashtra, will drive economic growth and generate numerous job opportunities.
Today’s Cabinet decision on developing a major port at Vadhavan in Maharashtra will boost economic progress and also create employment opportunities at a large scale. https://t.co/njmsVAL0z6
— Narendra Modi (@narendramodi) June 19, 2024
A government statement emphasised that the VGF support will lower the cost of power from offshore wind projects, making them feasible for purchase by power distribution utilities. While the projects will be established by private developers selected through a transparent bidding process, the power evacuation infrastructure, including offshore substations, will be constructed by Power Grid Corporation of India Ltd.”
This initiative follows a tender issued last September by the Ministry of New and Renewable Energy (MNRE) for developing offshore wind projects off the coast of Tamil Nadu, with a cumulative capacity of 7 GW. The high costs and lack of clarity on transmission infrastructure have been significant deterrents for investors. The VGF scheme is designed to address these challenges, providing essential financial support and infrastructure enhancements to foster the growth of offshore wind energy in India.
