Vizhinjam port set to get into big league

Thiruvananthapuram: The Vizhinjam international deepwater seaport and container transhipment terminal inched one more step towards becoming a reality when it received the Defence Ministry’s security clearance last week.

Vizhinjam is on the outskirts of Thiruvananthapuram, 16 km away from the City Centre and one km away from the city limits, but located within the Thiruvananthapuram Metropolitan City area. Vizhinjam is a natural port, which is located close to the international ship route.

Vizhinjam has been designed as a greenfield international deepwater seaport and container transhipment terminal. It earlier ran into trouble when the Central Government denied permission on security grounds to the project proposal because the bid had been won by a Chinese company. In the new round of bidding that followed, the Government selected the consortium led by Lanco Kondapalli Power Pvt. Ltd. and the Malaysian Pembinaan Redzai Sdn Bhd. for developing the port on a build-operate-transfer (BOT) model with an initial concession period of 30 years.

The total cost of the project, to be implemented in three phases, is estimated at Rs. 5,350 core ($1.3 billion), establishing six million TEUs (twenty equivalent units) per annum container handling capacity. The first phase would witness an investment of Rs. 2,390 crore ($580 million) with a capacity of three million TEUs. The State Government would have a 24 per cent stake in the first phase through Vizhinjam International Seaport Ltd. (VISL), a wholly owned government company. VISL would be the nodal agency to facilitate implementation of the project.

The cost of external infrastructure for Phase-I is estimated at Rs. 800 crore. Work on the first phase is expected to start by April 2009 and will be commissioned by 2012.

Vizhinjam, according to L. Radhakrishnan, Secretary for Power and Ports and Chief Executive Officer of VISL, has several advantages. It is only ten nautical miles from the major international sea route and the East-West shipping axis. The port would be a greenfield one with flexibility in design and connectivity.

What about the Sethusamudram project “The Sethu project has not been factored into our projections. If it does become a reality, work on the next stages of the Vizhinjam project would be faster,” according to Mr. Radhakrishnan.

“Vizhinjam has a bright future, thanks to the investment climate in the country. With a huge demand for port facilities, investments should start flowing in soon,” says Jayakumar, former CEO of VISL, who was involved in the project proposal from the beginning.

The State Government proposes to ensure the development of the areas around the port, which could cater to several ancillaries.