Vizhinjam International Deep Seaport

Breaking a seven-year jinx, Lanco Kondapalli's tender for Rs 8,000-crore Vizhinjam International Deep Seaport in Kerala got a thumbs up from the defence ministry on Tuesday. The Malaysian partner Pembinaan Redzai Sdn Bdh in the new consortium has been let in with two caveats.Earlier, the chiefs of Army, Navy and Air force had raised objections at the Chinese partners of the consortium, who got the tender, raising concerns over security issues. Defence minister AK Antony was unwilling to give it the go-ahead. Now, with the Chinese partners dropped, he defence ministry breezed through its clearances in a record 20 days.
"The defence ministry nod, is a turning point in the project's fortunes. But two more clearances - one from CBI and another from RAW -are needed to get the act together," Kerala ports minister M Vijayakumar said.
The project had been subject of much politicking too. While the Left had raged at Centre slamming the doors on the Chinese consortium for Vizhinjam and Hong Kong-based Hutchison for Mumbai and Chennai ports, back in Kerala, the LDF government hemmed and hawed through a long-winded route of retendering. The Vizhinjam Seaport calendar chalks out the first phase, costing Rs 5,426 crore, to be through by 2011. The Kerala government enjoys 24% stakes in the 30-years BoT project.The project is not only envisaged as India's first motherport, but also as the country's biggest port with handling capacity of 4.1 million TEU per annum. A mother-port is one which facilitates berthing of big vessels (which are the current shipping trend) to sail in with a depth of at least 14-15 metre. Unlike other ports that demand recurring costs in artificial dredging, Vizhinjam has a natural average depth of 25 metre. The way it is planned, the new port could cater to 12,000 big vessels at one go.
The second big advantage is that Vizhinjam lies in the international sea route. About 61% of Indian containers are transshipped through the ports of Colombo, Singapore and Salalah. This means that Indian exporters pay extra costs (freight costs at 11.4% of cost, insurance and freight-compared to the world average of 6.1%). A recent study by Container Shipment Economics say that Vizhinjam port can trim these costs. IL&FS and Hauer Associates, who associated in this study, estimate that as much as 1.35-1.60 million TEUs are likely to be diverted through Vizhinjam by 2016-17.But work on the strategic port is still under defence and home ministry scanner, sources said.This is because Hyderabad-based Lanco Kondapalli, which won the final tender, partners not just Lanco Infrastructure, but also the Malaysian firm Pembinan Razai.