How The New Vizhinjam Port Will Change India's Maritime Logistics

Last week, India's maritime industry celebrated a significant milestone with the arrival of the first cargo ship at the newly constructed Vizhinjam International Seaport in Kerala. The vessel, "San Fernando," was welcomed with a grand water salute, marking the beginning of operations at India's most advanced port. The event was attended by Kerala Chief Minister Pinarayi Vijayan, Union Ports Minister Sarbananda Sonowal, and other dignitaries, highlighting the port's potential impact on India's maritime logistics.

Overcoming Challenges

The Vizhinjam port project faced numerous challenges over the decades. Originally envisioned nearly a century ago, it struggled for thirty years to gain momentum. The Kerala state government and various stakeholders encountered persistent delays, and even the Indian Navy was approached at one point to undertake the project.

A turning point came in 2014 when KM Chandrasekhar, a former cabinet secretary and a Keralite, played a crucial role in reviving the stalled project. Chandrasekhar wrote a crucial letter to Montek Singh Ahluwalia, then the deputy chairman of the Planning Commission, which helped generate renewed interest and secure support.

One major hurdle was convincing investors to commit to the project. Initially, Gautam Adani, head of the Adani Group, hesitated due to concerns about work culture and local opposition. Chandrasekhar’s determination was pivotal in addressing these concerns. He engaged in extensive discussions with Kerala state government and opposition leaders, which were instrumental in convincing Adani of the port’s potential.

Gajendra Haldea, infrastructure advisor to Ahluwalia, played an active role in reassessing the project's viability under a public-private partnership (PPP) model. The federal and state governments agreed to offer viability gap funding, which was crucial for attracting private investment.

Former Kerala Chief Minister Oommen Chandy and Union Finance Minister Arun Jaitley further solidified the project by approving ₹810 crore in viability gap funding. Despite initial bidding failures, the Adani Group eventually committed to the project. Shashi Tharoor, the Congress party’s Lok Sabha member from Thiruvananthapuram, also helped convince Adani to participate in the bidding process. A 40-year concession agreement was signed between the Kerala government and Adani Vizhinjam Ports Pvt. Ltd., bringing the project to life.

A Technological Triumph

Vizhinjam is expected to be fully operational by December 2024, boasting South Asia's most advanced container handling technology. It will be India’s first semi-automated port, equipped with cutting-edge automation and IT systems. By 2028, the total investment will reach ₹20,000 crore, further solidifying its position as a global maritime hub.

Situated near the southern tip of India, just 12 nautical miles from major international shipping routes, Vizhinjam offers unparalleled convenience for global shipping lines. Its natural depth of over 20 meters allows it to accommodate some of the world’s largest vessels, a feat unmatched by other Indian ports without extensive dredging.

A Game-Changer for India's Maritime Industry

Vizhinjam's opening heralds a new era for India's maritime industry, reducing dependency on foreign transshipment hubs. This development is expected to enhance India’s share in international trade, reduce logistics costs, and boost the country's foreign exchange reserves. By providing a direct gateway for trade between Southeast Asia, the Middle East, and Africa, Vizhinjam will facilitate smoother and more cost-effective shipping operations. The port's advanced capabilities are poised to challenge China's dominance in the region, offering a competitive alternative for international shipping lines.

The arrival of the San Fernando at Vizhinjam International Seaport marks a significant step in India's maritime journey, demonstrating the nation's ability to innovate and compete on the world stage. KM Chandrasekhar’s pivotal role, alongside the support of numerous stakeholders, has made Vizhinjam a beacon of progress and potential, positioning India as a key player in international shipping.