Adani's Vizhinjam port to expand capacity with launch of second phase

By P R Sanjai

  India Prime Minister Narendra Modi is set to kick off the second phase of Adani Group’s mega port in Kerala on Friday, showcasing the solid political support for billionaire Gautam Adani amid an ongoing bribery probe in the US. 

 

The Vizhinjam transshipment terminal, which began operations in July and has handled about 250 container ships so far, is forecast to attract about Rs 9,500 crore ($1.1 billion) in additional investment that would triple the port’s capacity, according to people familiar with the internal plans who didn’t want to be identified.  

 

Modi’s endorsement not only bolsters the port-to-power Adani conglomerate, it also shows that the overhang around the US indictment could be easing for Asia’s second-richest person as his group returns to aggressive growth plans in the domestic market.

 

The Vizhinjam port that will “be dedicated to the nation” by Modi on May 2, is just 10 nautical miles from global shipping routes and will have an annual capacity of up to 5 million TEUs, Adani Ports & Special Economic Zone Ltd. said in a full-page local newspaper advertisement on Thursday. The investment across all phases will be around 180 billion rupees, the advertisement added. 

 

Strategically positioned also near key international shipping channels with natural depths of up to 20 meters, Vizhinjam will be able to host the largest container ships, which in the past skipped India and instead docked at ports in Colombo, Dubai and Singapore.

 

“Given the country’s growing trade volumes with the global market, the port will play a critical role in reducing supply chain risks for Indian exports and imports,” said Afaq Hussain, director at New Delhi-based consultancy Bureau of Research on Industry and Economic Fundamentals.  

 

For Modi, Adani’s deepwater transshipment terminal has geopolitical significance because it puts India on the global maritime map, which is currently dominated by China. About 75 per cent of India’s transshipped cargo has been being handled by ports overseas.

 

Indian ports have been losing an estimated $220 million in potential revenue annually due to this and businesses are bearing additional costs of $80 to $100 per container, the people said.

 

Major routes

 

Vizhinjam is expected to facilitate the movement of transshipment traffic into India as well as on the major routes between the US, Europe, Africa and East Asia.

 

Hussain said a significant amount of India’s cargo gets transshipped at the Colombo port. Vizhinjam has the potential to reduce India’s dependence on this port with a significant Chinese presence. 

 

Geneva-headquartered Mediterranean Shipping Co. in March included Vizhinjam for its Jade shipping service route from Europe to Asia, connecting ports in China, South Korea, Singapore, Spain and Italy, according to an Adani Group spokesperson.

 

“If full-fledged operations begin as planned by 2028–29, the facility could significantly boost cargo movement across Adani’s wider network of ports and terminals along the east and west coasts” of India, Hussain said.