Adani Group gets Modi's blessing as it expands mega India port
INDIA Prime Minister Narendra Modi is set to flag off the second phase of Adani Group's mega port in Kerala on Friday, showcasing the solid political support for billionaire Gautam Adani amid an ongoing bribery probe in the US.
The Vizhinjam transshipment terminal, which began operations in July and has handled about 250 container ships so far, is expected to see about 95 billion rupees (S$1.44 billion) in additional investment for tripling the port capacity, according to people familiar with the internal plans who did not want to be identified.
Modi's endorsement not only bolsters the port-to-power Adani conglomerate, it also shows that the overhang around the US indictment could be easing for Asia's second-richest person as his group returns to its aggressive growth plans in the domestic market.
Vizhinjam port that 'will be dedicated to the nation' by Modi on May 2, is just 10 nautical miles from global shipping routes and will have an annual capacity of up to 5 million TEUs, Adani Ports & Special Economic Zone said in a full page local newspaper advertisement on Thursday. The investment across all phases will be 180 billion rupees, the advertisement added.
Strategically positioned near international sea routes and with shipping channels with natural depth of up to 20 m, Vizhinjam will be able to host the largest of container ships which in the past were skipping India and docking at ports in Colombo, Dubai and Singapore.
'Given the country's growing trade volumes with the global market, the port will play a critical role in reducing supply chain risks for Indian exports and imports,' said Afaq Hussain, director at New Delhi-based consultancy Bureau of Research on Industry and Economic Fundamentals.
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For Modi, the Adani's deepwater transshipment terminal has geopolitical significance as it puts India on the global maritime map, which is currently dominated by China. About 75 per cent of India's transshipped cargo has been being handled by ports overseas.
Indian ports have been losing an estimated US$220 million in potential revenue annually due to this and businesses are bearing additional costs of US$80 to US$100 per container, the people said.
Major routes
Vizhinjam is expected to facilitate the movement of transshipment traffic into India as well as on the major routes between the US, Europe, Africa and East Asia.
Hussain said a significant amount of India's cargo gets transshipped at the Colombo port. Vizhinjam has the potential to reduce India's dependence on this port with a significant Chinese presence.
Geneva-headquartered Mediterranean Shipping in March included Vizhinjam for its Jade shipping service route from Europe to Asia connecting ports in China, South Korea, Singapore, Spain and Italy, according to an Adani Group spokesperson.
'If full-fledged operations begin as planned by 2028-29, the facility could significantly boost cargo movement across Adani's wider network of ports and terminals along the east and west coasts' of India, Hussain said. BLOOMERG
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