Amid rising costs, JNPT plans capacity expansion for third time

Country's largest container port Jawaharlal Nehru Port Trust’s (JNPT) plans to deepen its channel have been delayed due to bureaucratic hurdles.

JNPT handles 60 per cent of India's container traffic. After a six-year delay and an over 80 percent cost escalation, port authorities are now working to expedite the process and are confident of the project finally taking off . They hope to start work as early as October this year.

The port is now working on seeking ministry approvals and calling bids simultaneously to expedite the process.

L Radhakrishnan, Chairman at JNPT said, “We have compressed the processes and hope there are no more delays. We already have got initial bids from one Indian and 4 foreign companies.”

JNPT plans to raise Rs. 1500 crore through tax-free bond issue to fund the first phase of the dredging. The dredging project will deepen JNPT's channel to 14 metre in the first phase from 11 metre now allowing larger vessels to reach the port, improving its capacity.

But the project failed twice earlier, the last being in 2009 when JNPT scrapped a contract won by Belgian firm Van Oord, since their bid was 20 per cent over the estimated cost of Rs. 800 crore.

A K Prabhakaran of Anand Rathi Securities said, “Cost will keep going up. So they need to take up the project now. They have also lost traffic to other private ports around.”

JNPT has been facing congestion issues, operating at over 90 percent capacity utilisation and has also been slowing losing container volumes to neighbouring private ports such as Mundra and Pipavav in Gujarat.

With a new management in place, the port is now confident of meeting it target of 10 million tonne capacity in the next 4 years.