A port in Vizhinjam was one of former Kerala CM Oommen Chandy’s dreams. Multiple governments attempted to construct a port in the PPP mode but failed. IFC, which was roped in to prepare a report, pointed out that the project would not be viable on a standalone basis without substantial government funding of 85% of the cost.
Even though the project was financially unviable, both CPI(M)-led and Congress-led political formations were intent on developing the port. They both knew it had the potential to change the economic landscape of Kerala. Planning Commission’s help was sought.
Deputy chairman Montek Singh Ahluwalia deputed his adviser Gajendra Haldea for the the job. In the next few months, Haldea spearheaded the project with the support of chief secretary E K Bharat Bhushan and shipping secretary James Varghese. After several abortive bids, the Adani Group came forward with a bid. Chandy and his cabinet accepted the single bid.
In the world of shipping, location is key. No port exemplifies this better than Vizhinjam, India’s first deep-water container trans-shipment hub. It is only 10 nautical miles away from the east-west international route, close to two of the world’s busiest shipping lanes – the Straits of Hormuz and Malacca – and has a natural draft of 20 m, sufficient to accommodate ultra-large container ships and mega crude carriers.
Vizhinjam’s development will be across multiple phases, with an anticipated total investment of about ₹28k cr. Once operational, the port will feature a 2,000 m container berth, a 1,220 m multipurpose berth, and 19,000 ground slots capable of handling 5-6.5 mn TEUs. As a fully automated, all-weather port, it’s designed to operate year-round, ensuring reliability in global supply chains. Reliance on foreign ports like Singapore, Colombo and Jebel Ali will largely cease as Vizhinjam reaches its full capacity.On a standalone basis, the port will generate 4,000-4,500 direct jobs, and about 20,000 indirect ones. The port will anchor a broader ecosystem of logistics hubs, manufacturing clusters, food parks and SEZs, transforming Kerala’s economy and export profile. This development could create lakhs of jobs and elevate Kerala and southern India from a labour-export economy to a hub of high-end exports and global trade. China, with its vast network of world-class ports, has been dominating global trade. Vizhinjam could reverse this trend by enhancing the efficiency of other Indian ports and bringing back to Indian shores 85% of trans-shipment cargo that now passes through ports abroad. It is estimated that logistics accounts for 13-14% of India’s GDP. A trans-shipment port within its shores will reduce India’s logistics cost by about 4-6%.In less than 90 days since the first ship, San Fernando, was welcomed to the port in July, several of the world’s largest vessels from major global shipping companies have docked at Vizhinjam. The recent docking of MSC Claude Girardet, an ultra-large container vessel operated by Swiss giant Mediterranean Shipping Company and sailing under the flag of Liberia, in September, with a capacity of 24,116 containers, is a milestone. It is the largest vessel to dock in South Asia, showcasing Vizhinjam’s ability to handle ultra-large ships and positioning it as a critical player in global shipping.
What is needed now is speed in connecting Vizhinjam to interior commercial hubs in India by road and rail. Fishermen have been expressing their reservations. Their promised new fishing harbour must be built soon. What’s most encouraging is that successive govs, belonging to opposing political formations, and GoI, set aside their political differences and worked shoulder-to-shoulder with the chosen concessionaire for the growth of this port. Hopefully, this will be the harbinger of a new ‘Kerala model’ based on genuine cooperative federalism.