The Union Cabinet has given its ?in-principle? approval for setting up a major port at Vadhavan near Dahanu in Maharashtra. The total cost of the project will be around Rs 655.45 billion. Vadhavan port will be developed on ?land lord model? and will be 13th major port of the country. A Special Purpose Vehicle (SPV) will be formed with Jawaharlal Nehru Port Trust (JNPT) as the lead partner with equity participation equal to or more than 50 per cent to implement the project. The SPV will develop the port infrastructure including reclamation, construction of breakwater, besides establishing connectivity to the hinterland. All the business activities would be undertaken under public-private partnership (PPP) mode by private developers.

Currently JN Port is the biggest container port in India with a world ranking of 28th handling container traffic of 5.1 million TEUs. Even after the completion of its fourth terminal at JN Port with a capacity increase upto10 million TEUs by 2023, it will stand as the 17th largest container port in the world. With the development of Vadhavan port, India will break into the countries with top 10 container ports in the world.

The reason for another major port on the west coast of the country is due to the fact that there is a need for a deep draft port that can accommodate the largest container ships in the world and also cater to the spill over traffic from JNPT once its planned capacity of 10 million TEUs is fully utilised. JNPT and Mundra, the two largest container handling ports of the country (for mid size container ships only), have drafts of 15 m and 16 m respectively, while the world?s largest container handling modern deep draft ports require a draft of 18-20 m. The Vadhavan port has a natural draft of about 20 m close to the shore, making it possible for the port to handle bigger vessels at the port.

Development of Vadhavan port will enable call of container vessels of 16,000-25,000 TEUs capacity, giving advantages of economies of scale and reducing logistics cost.

The ever increasing size of container ships makes it imperative that a deep draft container port in west coast of India is developed. Increasing containerisation of cargo in the wake of value-added manufacturing sector makes it important to prepare port infrastructure for handling value-added import and export to facilitate manufacturing activity. The demand for container traffic will further accelerate after the plans for improving logistic infrastructure fructify and the ?Make in India? push drives greater exports and manufacture sourcing to India.