India to Set Up Major Port at Enayam

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India’s Union Council of Minister has given its ‘in-principle’ approval for setting up a major port at Enayam near Colachel in Tamil Nadu.

According to the information provided by the Indian government, a Special Purpose Vehicle (SPV) will be formed for development of this port with initial equity investment from the three major ports in Tamil Nadu i.e. V.O.Chidambaranar Port Trust, Chennai Port Trust, and Kamarajar Port Limited.

The SPV will develop the port infrastructure including dredging and reclamation, construction of breakwater, and ensuring connectivity links.

“At present, there are only a few ports in India that have sufficient draft and can match global cargo handling efficiencies. Currently, all of India’s trans-shipment traffic gets handled in Colombo, Singapore and other international ports. Indian port industry loses out upto Rs 1,500 Crores of revenues each year,” the government said.

India added that establishing this major port at Enayam will not only act as a major gateway container port for Indian cargo, that is presently trans-shipped outside the country, but also become a transshipment hub for the global East-West trade route.

Enayam would also reduce the logistics cost for exporters and importers in South India who currently depend on trans-shipment in Colombo or other ports thus incurring additional port handling charges.

However, there is a possibility that the proposed new port would create excess capacity in the region, eroding the economic viability of half a dozen ports in the vicinity, The Hindu cited industry experts.

Furthermore, the costs of port infrastructure works could be very high as two breakwaters would need to be constructed to protect the port facility from waves and currents. Additionally, dredging cost to maintain minimum 15 to 16 ft draft could make the project economically unviable.

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