Tuticorin Port, also known as V.O. Chidambarananar (VOC) — a major government gateway in South India — has signed a concession agreement with Mumbai-based JM Baxi Group for converting one of its existing bulk berths into a container terminal.
“As per the concession agreement, the container handling facility will be developed by the concessionaire at an estimated cost of Rs. 434.17 crores (about US$55 million), with an estimated capacity addition of 600,000 TEUs per annum,” VOC said in a press announcement.
The project, named Tuticorin International Container Terminal Pvt. Ltd. (TICTPL), would increase VOC’s capacity to nearly 1.8 million TEUs a year upon completion.
JM Baxi/TICTPL had bid Rs.1900.44 (about US$24) per TEU as the revenue share/royalty for VOC.
“The project would be executed on a DBFOT (design, built, finance, operate and transfer) basis, with a construction period of 21 months and is slated to be completed by December 2024,” the port authority noted.
VOC chairman T.K. Ramachandran said, “The terminal with a length of 370 metres and draft of 14.20 metres would be able to cater to vessels of up to 8000 TEUs, thereby facilitate attracting more investments and pave the way for the economic development of the region.”
For JM Baxi, it’s the second container terminal contract win at a major port in as many months, having bagged the tender to privatise Nhava Sheva Port/JNPT’s oldest facility, Jawaharlal Nehru Port Container Terminal (JNPCT), under a government-led national programme to monetise stressed port assets.
VOC has two box terminals at present, PSA Sical and Dakshin Bharat Gateway Terminal (DBGT) – the latter is a joint venture (JV) between Bollore Africa Logistics and an Indian partner.
The fate of PSA Sical has been in limbo because of ongoing litigation with VOC over royalty payment issues. VOC recently issued a termination notice to PSA after the private terminal operator had failed to settle long overdue royalty obligations.
PSA has secured a temporary “status quo” reprieve from India’s Supreme Court, but it has already ceded much of its market share to its competitor DBGT. The opening of a third box facility would only further darken the outlook for PSA Sical.
VOC is the second-busiest container handler on India’s east coast. It saw some 780,000 TEUs in fiscal year 2021-22 and 338,000 TEUs from April to August, the first five months of fiscal 2022-23. Out of 780,000 TEUs, DBGT contributed about 600,000 TEUs, data shows.
The port expects to reach a throughput level of 1.16 million TEUs by 2024-25 and 2 million TEUs by 2034-35, according to current projections.
Jenny Daniel
Global Correspondent
Contact email: j.daniel@container-news.com
