Adani Ports will invest ₹20,000 crore in Kerala’s Vizhinjam Transhipment Terminal by 2030, managing director and chief executive Karan Adani said on a day the upcoming transhipment terminal officially received its first ship.
The Zhen Hua 15, carrying cranes ordered for the port construction, was formally received by Kerala chief minister Pinarayi Vijayan and joined by various dignitaries. A water salute from towing rigs welcomed the visiting vessel. The port is scheduled to begin operations between May and December next year, marking a milestone in the state’s infrastructure development journey.
According to Rajesh Jha, managing director and CEO of Adani Vizhinjam Port Pvt. Ltd, which is building the port, the project has already received ₹7,700 crore investment in phase one, with the company investing ₹2,500-3,000 crore and the rest coming from the state and central governments, including viability gap funding.
Vizhinjam is India’s only transhipment port with a natural depth of more than 18 metres, which is critical to attracting large vessels. It is also only 10 nautical miles off the international shipping route, closer than many domestic and international ports, allowing ships to dock quicker without deviating far from their route.
It is also strategically significant. Vizhinjam has the potential to significantly reduce reliance on foreign transhipment hubs such as Sri Lanka’s Colombo port, which is supported by Chinese entities.
The Vizhinjam project is crucial to the Adani group as well. The 13 ports or terminals run by Adani Ports and Special Economic Zone Ltd (APSEZ) currently have the capacity to handle 580 million tonnes (mt) of cargo a year. In FY23, the port operator handled 339.2 mt of cargo. By 2030, APSEZ aims to become the world’s largest port operator and handle 1 billion tonnes of cargo. “Vizhinjam will accelerate the growth of APSEZ and achieve our vision,” said Adani.
“Unlike others, this is a transhipment port. It is extremely important for us. It is also strategically very important. This gives us a foothold from all our ports. Because of its closeness to Colombo, we will be able to give a solution to all our ports. When we look at the whole coast, end of the day, this is an aggregation point,” he said.
He said there is a lot of interest from “two to three anchor shipping lines” willing to shift base to Vizhinjam, and the company is considering exclusive arrangements with them. “They are unhappy at other ports. There is limited capacity,” he said. More than the advantage of free pricing, he added, Vizhinjam will provide better infrastructure, better depth, and connectivity with major trade routes.
“The size of vessels is increasing in the international trade route. In the next 10 years, the average size of ships will be around 12-15,000 TEUs (twenty-foot equivalent units) in size against the current 6,000-8,000 TEUs. Vizhinjam can handle 20,000 TEU ships with better depth,” Adani said.
He said Adani Ports has free cash flows of ₹7,000 crore- ₹8,000 crore and will invest ₹5,000 crore- ₹6,000 crore as capex every year.