Govt set to invite EoIs for Rs 41k-cr Great Nicobar Port on Saturday

Ambitious Rs 41k-cr transhipment terminal plan mired by environmental concerns

The Centre on Saturday will invite expressions of interest (EoI) for the development of an international container transhipment port at Galathea Bay of Great Nicobar in the Bay of Bengal, the ministry of ports, shipping and waterways said on Friday.

The project, which is being complemented by an airport, a power plant, and a township is estimated to cost Rs 72,000 crore. The port’s cost has been set at Rs 41,000 crore by the Centre and will be undertaken on a public-private partnership (PPP) mode.

Close to 850,000 trees may have to be felled for the project.

Despite the numerous environmental issues brought to the fore during the conception stage of the project, the Centre finally decided to go forward with it, seeing an economic opportunity in south-east Asia’s maritime trade, it is learnt. 

“Currently, nearly 75 per cent of India’s transhipped cargo is handled at ports outside India.

Colombo, Singapore and Klang handle more than 85 per cent of this cargo. Of this 85 per cent, Colombo Port handles more than 45 per cent. Indian ports can save $200-220 million each year on transhipment cargo (with this port).

Also, developing Galathea Bay Transhipment Port will accrue significant benefits. These are forex savings, foreign direct investment (FDI), increased economic activity at other Indian ports and enhanced logistics infrastructure. It will lead to employment generation, and increased revenue share,” the ministry said.

The EoI document will be available on the website of Syama Prasad Mookerjee Port, Kolkata.

The project will be undertaken in four phases, with the first phase expected to be commissioned by 2028, with an estimated cost of Rs 18,000 crore. This will include construction of breakwaters, dredging, reclamation, berths, storage areas, building and utilities, procurement and installation of equipment and development of the port colony.

While the core infrastructure will be developed by government support, the PPP concessionaire will develop the storage area, container handling equipment and other infrastructure based on its own market and business assessment.

However, the minimum infrastructure will have to be based on the minimum guaranteed traffic in the concession agreement.

The private entity will be given a 30-50 year concession agreement, based on the requirement, the ministry said. It added that the concessionaire will have the rights to levy, collect, and retain charges from port users.

Several shipping majors are expected to show interest in the project, given its geographical advantage of being close to international shipping routes and a natural draft depth of 20 metres, implying greater efficiency in handling bigger container vessels. Moreover, a higher handling capacity would also entail transhipment business from Indian ports as well.

The mega port is envisaged to have seven berths and 125 hectares of land for a container yard.

India, despite its size and vast coastline, has not been able to benefit from the transhipment market. This is due to a combination of geographical and policy-induced factors, including poor capacity handling at existing ports.

However, the project has been mired in controversy over threat to the environment that this infrastructural intervention would entail.

Earlier this month, a group of former civil servants reportedly wrote to President Droupadi Murmu asking her to halt the project. They said it would have irreversible consequences on the ecologically-sensitive islands.

Meanwhile, the government’s proposal of wiping out over 13,000 acres of forests in the island with compensatory afforestation in the Aravali hills in Haryana has not been taken well either.

Experts previously pointed out that the area had seen 444 earthquakes over the past decade and there should be a serious reconsideration of the project.

The clearance by the environment ministry, granted in November 2022, also lacked any provisions for halting work in the event of negative consequences. The project saw even further scrutiny from environmentalists after the serious environmental repercussions seen in Joshimath recently.