Indian conglomerate Adani Group has started construction on India’s first trans-shipment port, Reuters reported. The Indian government will give the Adani Group a grant of Rs 1,600 crore for the project, which is being built at Vizhinjam, Kerala. The port lies hard by the Gulf-to-Malacca shipping lane that carries almost a third of world sea freight.
Once Vizhinjam is operational the central government will start building the port of Enayam in neighbouring Tamil Nadu, said a senior shipping ministry official. India’s 7,500-km (4,700-mile) coastline juts into one of the world’s main shipping routes and by bringing onshore cargo handling now done at entrepots in Sri Lanka, Dubai and Singapore, Modi’s government expects cargo traffic at its ports to jump by two-thirds by 2021 as India ramps up exports of goods including cars and other machinery.
New Delhi expects the new ports to save Indian companies hundreds of millions of dollars in transport costs, as well as ease concerns over the growing strategic clout in South Asia of rival China, which has invested hundreds of millions of dollars in Sri Lankan ports at Colombo and Hambantota.
India is worried about China’s expanding reach in the region through port investments in Sri Lanka, Bangladesh and the Maldives. China is also developing Pakistan’s Gwadar seaport as part of a $46 billion China-Pakistan Economic Corridor. China had also wanted to partner with an Indian company to build the Vizhinjam port, but its proposal was rejected by the government on grounds of national security.
The docking of a Chinese nuclear submarine at Colombo’s commercial port in 2014 shocked India’s security establishment and has added urgency to New Delhi’s push to strengthen its port infrastructure. Vizhinjam port will have dedicated berths for India’s navy and coastguard, according to a government note seen by Reuters.
HOW WILL IT AFFECT MALDIVES?
The port at Vizhinjam, Kerala is just 500 km away from the proposed location for iHaven project Haa Alif Atoll in Maldives. President Yameen, speaking at the flag hoisting ceremony at in 2014 Independance day, said that the project for Ihavandhoo Atoll will bring an influx of money and job opportunities, prompting great progress in the north of the country. Could this new development in Kerala lead to a change of plans by government of Maldives?