SPV for Lanka sea lane

Govt tackles core issues, and more

The government today approved the setting up of a special purpose vehicle (SPV) "" Sethusamudram Corporation Limited "" with Rs 800 crore equity and Rs 1,200 crore debt for completing the Sethusamudram Ship Canal project.

The project aims to to create a navigable channel from the Gulf of Mannar to the Bay of Bengal through Palk Strait.

The project will cut about 400 nautical miles of distance and save upto 36 hours of sailing time for ships travelling from the east coast to the west coast.

The Sethusamudram project proposes to create a ship canal to suit different drafts through dredging in Adam's bridge and Palk Bay.

The proposed navigation route will originate from Tuticorin new harbour in the Gulf of Mannar and pass through the canal created in Adam's Bridge within the international boundary, thus saving time and distance for ships that otherwise had to travel around Sri Lanka.

The CCEA, which met here today, approved the ambitious project that would be jointly taken up by Shipping Corporation of India and Tuticorin Port Trust with an investment of Rs 50 crore each.

Dredging Corporation of India, Chennai Port Trust, Ennore Port Limited, Visakhapatnam Port Trust and Paradip Port Trust would contribute Rs 30 crore each.

The balance would be contributed by the government. The Budget for 2004-05 had allocated just Rs 20 crore for the project, which is inclusive of expenditure to be incurred on river regulatory projects like dredging in various ports particularly, Kolkata.