The Union Cabinet of India has recently granted its ‘in-principle’ approval for the creation of a significant port at Vadhavan, located near Dahanu in Maharashtra. This monumental step puts India on the pathway towards being featured among the nations that host the top 10 container ports in the world. A container port is a facility that specializes in managing goods transported in containers. The development model of choice for this endeavor will be the ‘landlord model’.
Understanding Port Models: The Landlord Model
In the landlord port model, a regulation and leasing role is undertaken by the publicly governed port authority. Meanwhile, private corporations are tasked with managing port operations. These responsibilities primarily include activities related to cargo-handling.
The Role of Special Purpose Vehicle (SPV)
For successful implementation of the project, a Special Purpose Vehicle (SPV) will be created. The Jawaharlal Nehru Port Trust (JNPT), which holds the title of being the largest container port in India, will take the lead in this SPV formation.
Jawaharlal Nehru Port currently ranks 28th globally in terms of traffic handling capacity. Upon completion of its 4th terminal, JNPT’s capacity will escalate to 10 million TEUs (Twenty-Foot Equivalent Units). Such expansion would catapult it to the position of the 17th largest container port worldwide.
Responsibilities and Tasks of the SPV
The SPV is expected to take on several critical tasks in the process of port development. These include reclamation, construction of breakwater, and establishment of connectivity to the back-country areas. Reclamation involves creating new land from oceans, riverbeds, or lakes. Breakwaters are structures constructed near coastlines to protect from the force of waves.
Public-Private Partnership (PPP) Mode for Business Activities
For the Vadhavan port project, all business activities will be carried out under the Public-Private Partnership (PPP) mode. This means that private developers will play a key role in the actual realization of the project.
Differentiation between Major and Minor Ports
It is important to note that the Union Government of India takes charge of the development of Major Ports in the country. On the other hand, minor ports fall within the jurisdiction of their respective State Governments. This is a crucial distinction when it comes to understanding the responsibility dynamics in port development across the country.
The development of the major port at Vadhavan marks one of the significant milestones for India in its march towards being a prime player in global shipping and trade activities.
Source: PIB
