Maharashtra Maritime Board explores private route to build Vadhawan Port

The Maharashtra Maritime Board (MMB) has started “internal discussions’ on building a new private port at Vadhawan in Palghar district on the public-private-partnership (PPP) model, citing delays in getting Central Government approval for the project, now helmed by state-owned Jawaharlal Nehru Port Trust (JNPT) as a major port.

“JNPT is ready to implement the new port in accordance with the memorandum of understanding (MoU) signed with the Maharashtra government in June 2015, but is yet to submit the project for environment clearance because the Central Government has not approved it. Cabinet approval is required for investing in the development of a new major port by the Central Government. The state government had agreed in the MoU that it would be a major port, with JNPT holding 74 per cent stake and MMB the balance,” an official briefed on the development said.

A Maharashtra government official said MMB -- the agency tasked with developing ports in Maharashtra -- had sought JNPT’s views on its “thinking” to develop Vadhawan as a private port and not as a joint venture between India’s biggest container port and MMB.

“Because it was taking a lot of time, we decided to explore this route also. We had written to JNPT seeking its opinion on developing it as a private port,” the official said.

“It’s an internal discussion; no decision has been taken, the MoU stands,” an official with MMB said.

The Dahanu Taluka Environment Protection Agency, an agency set up by the Maharashtra government to scrutinise and approve projects coming up in ecologically sensitive Dahanu taluka, has opposed the new port, saying it is an industry which cannot be permitted in the area.

Under the PPP model, an infrastructure project is awarded to a private firm through a competitive bidding process.

A port consultant said the huge costs involved in creating basic infrastructure such as a break water, dredging, reclamation and rail-road connectivity could delay implementation of the port by a private entity.

“Vadhawan will be given to somebody who will put it in cold storage. It will go the Rewas way and Maharashtra ports will lose again in the process,” he said.

The concession agreement for developing Rewas port was signed in 2002, but the project is yet to take off. The port consultant said altering the mode of implementing the new port was not that easy.

“Based on the MoU, the shareholders’ agreement was signed between JNPT and MMB and a special purpose company was registered two years ago. After having done all this, if the Maharashtra government is now thinking of developing it not as a JV but by giving it to a private party, it will have to first wind up the company. It cannot do that unless the company is dissolved with the approval of JNPT. The Central Government must also agree to this. It’s not so simple,” he said.

COMMENT NOW