Adani’s new mega port to bring world’s biggest ships to India

With its location close to the southernmost point of the nation and its upcoming October 15 opening as India's first transshipment container port, Vizhinjam will provide India a greater share of the world's marine trade, which is now controlled by China. By lowering the cost of logistics for freight entering and leaving the nation, it will also support its goals of becoming a substitute manufacturing centre.

The establishment of the new facility will add to the success of Gautam Adani's conglomerate. In January, the Adani Group was accused of corporate wrongdoing by a group of short sellers, an accusation that the Adani Group has refuted.Vizhinjam will solidify the billionaire's position as India's infrastructure king, as he already controls ports, mines, airports, and power utilities.

Some of the largest ships in the world call at Vizhinjam because of its close proximity to international shipping routes, which account for thirty percent of all cargo flow worldwide, and a natural waterway that descends to a depth of 24 meters below the surface of the ocean.The largest container ships have up to now avoided India in favor of nearby ports like Colombo, Dubai, and Singapore since the country's harbors aren't deep enough to accommodate them.

In partnership with the state government of Kerala, Adani Ports and Special Economic Zone Ltd. are developing the much anticipated deep-sea port along the picturesque coastline.As part of its growing worldwide footprint, Adani Ports, the largest private sector port operator in India with a 30% market share, is also building the port in Haifa, Israel, and has plans to construct a hub in Vietnam.

According to Chakri Lokapriya, chief investment officer of TCG Asset Management Co. in Mumbai, "the Indian Ocean is 50% of sea trade.""With its inherent benefits, the Vizhinjam port will increase Adani Ports' operating margins."According to a Reserve Bank of India assessment from 2022, India's entry into the global value chain has been hampered by poor marine connections.

In 2020, China handled 245 million TEUs of containers, while India handled just 17 million TEUs, according to a port ministry statement dated February 7.

The parliament was informed by the Narendra Modi-led government that this would soon alter.

"Universel Factory"

The ministry stated in the statement that by increasing container and cargo traffic, "the upcoming ports at Vizhinjam (Kerala) and Vadhavan (Maharashtra) have natural drafts in excess of 18 meters that would enable ultra large container and cargo vessels to call on the ports thereby boosting the efforts to make India the world's factory."

The Adani Ports website states that Vizhinjam port will provide a rapid turnaround for vessels, including Megamax container ships. At an investment of 77 billion rupees ($925 million), it will have a capacity of one million twenty-foot equivalent units, or TEUs, in the first phase. The following phases will add about 6.2 million TEUs.
Running a transshipment container terminal won't be simple, even for Adani Ports, a business with extensive expertise that has dealt with complaints from fisherman at this location. Procedural delays have plagued Dubai Ports World's competing project at Vallarpadam.

Additionally, a network of rail and road connections between the transshipment hub and the hinterland's factories and warehouses are required. According to Mathew Antony, managing partner of Aditya Consulting, an advising firm that specializes in infrastructure, ports, and logistics, the absence of such an artery support "can be the Waterloo" for any port.

Location Strategy

The goal of the federal government's Maritime India Vision 2030 is to invest an estimated 1.25 trillion rupees to build world-class megaports, transshipment hubs, and modernize infrastructure.

Given its advantageous location between the Strait of Malacca and the Suez Canal, India can integrate itself into the growing importance of large ships in the trade between China and Europe.

India now has less than 10% of China's container traffic, but Adani Ports and India will have a stronger position in the world's maritime trade if the Vizhinjam port can attract more ships.