The ₹7,056-crore outer harbour development project at VOC port, in Thoothukudi, is being revived two decades after it was initiated without much success. After the first tender for the project evoked poor response, the port authority re-tendered, which saw large companies like Adani Ports, DP World and Vedanta Group participating in the pre-bid meeting. It would be interesting to see who finally bid.
But, first, why does the port need an outer harbour?
The main reason is the growing size of container ships in the past five years — lengths extending beyond 400 m and carrying capacity of nearly 22,000 twenty foot equivalent units (TEU) — whereas VOC port can handle only half this size.
Mere modernisation of the inner harbour and optimisation of existing berths cannot equip the port to handle the large vessels. An outer harbour is needed to meet future demand, says the detailed project report.
In line with the Centre’s Sagarmala scheme, VOC port intends to handle 14,000-TEU Neo Panamax and other larger container vessels, leveraging its proximity to the international sea route.
According to Drewry Maritime Advisers, in two decades VOC port’s container traffic will grow to 2.8-4.3 million TEU from 0.74 million TEU in 2023-24. The port can also convert from feeder to mainline to attract more cargo, including cargo that is currently transshipped at Colombo and other Asian ports, the DPR document says.
Mounting delays
The planned development of a transshipment hub in Kanyakumari has been delayed due to various reasons, the document says.
To be able to handle fully laden Neo Panamax vessels in the inner harbour, VOC port has decided to increase vessel draught from 14.2 m to 15.5 m.
Over the past decade, the outer harbour project was deferred to optimise the inner harbour capacity and develop a new transshipment port at Enayam/ Kanyakumari. But even the inner harbour works have not commenced due to the revised dredging policy/ rate.
Moreover, as Jagannarayan Padmanabhan, Senior Director at CRISIL, pointed out, the backup area in the inner harbour is not enough for a container yard.
Sri Lanka factor
In Sri Lanka, the ongoing economic crisis has hit port operations in Colombo. With timely development of infrastructure to handle large mainline vessels, VOC port could have benefited, an industry source said.
Armed with deep draught berths, it can not only handle the largest vessels plying in international routes but also serve as a transshipment hub, the DPR document says. Phase two of the outer harbour project is expected to enable the handling of vessels that require draft up to 18 m.
VOC port stakeholders point to the paucity of infrastructure needed to handle mainline vessels of 18,000 TEU. Their demands include an outer harbour capable of handling 18-m draught vessels and a quay length of 1,000 m at minimum.
Forex savings
Nearly 65 per cent of containers from Thoothukudi are transshipped at Colombo, an all-weather port with 24x7x365 operations.
Edwin Samuel, founder and CEO of Thoothukudi-based Pearl Shipping, said local exporters and importers pay about $150 per TEU as transshipment cost and face a weeklong transit time.
Thoothukudi, with its locational advantage at the southern tip of the peninsula, can be developed as an alternative to Colombo, he said. The cost and time savings promised by the outer harbour project can make exports competitive and save the country precious foreign exchange as well, he added.
Several new industries have come up in the port’s vicinity, including Tata Solar and Vikram Solar in Gangaikondan SEZ, Vinfast and furniture park in Thoothukudi, and the rocket launchpad at Kulasekarapattinam. These will create additional cargo volumes, calling for expansion of the port’s infrastructure, said Samuel, who is also president of the Association for Tuticorin Hub Port Development.
The association had engaged consultants PwC in 2005 to produce a feasibility report on developing Thoothukudi as a transshipment hub port. In 2013, the then Union finance minister P Chidambaram announced the first phase of the project at an outlay of ₹7,000 crore. His successor, Arun Jaitley had, in the 2014 budget, increased the outlay to ₹11,000 crore. “But, unfortunately, the project was put on the backburner for various reasons and we lost more than a decade,” Samuel said.
