The Tuticorin VOC Port is on the cusp of a significant expansion, with a proposed investment of Rs20,647 crore aimed at enhancing its capacity and infrastructure. This ambitious project, led by the state-run Jawaharlal Nehru Port Authority (JNPA), has attracted interest from a range of major industry players, signalling a pivotal moment in the development of India’s port infrastructure.
The planned upgrade involves comprehensive dredging, offshore reclamation, and shore protection works under a public-private partnership (PPP) model, specifically the Hybrid Annuity Model (HAM). The initiative has garnered attention from 48 entities, including prominent construction and engineering firms such as Larsen & Toubro, Tata Projects, and Hyundai Engineering and Construction, among others. JNPA recently issued an Expression of Interest (EoI) for the selection of a private partner to undertake this extensive project. The significant engagement from potential bidders underscores the project’s scale and the high level of interest from the industry.
The PPP-HAM model, which is being applied to this project for the first time in the port sector, has seen considerable enthusiasm from major players, with the expectation of a robust competitive bidding process. The project scope includes dredging an approach channel and harbor basin, reclaiming an offshore area of 1,227 hectares, and maintaining the developed infrastructure over the long term. The financial structure of the HAM model involves an initial 40 percent payment during the construction phase, with the remaining 60 percent disbursed as a variable annuity based on the project’s asset value and residual debt. However, the introduction of this new model has not been without its challenges. Potential bidders have raised concerns regarding the allocation of maintenance risks and the conditions for milestone-based payments. Additionally, there is a call for clarity on whether a general consultant will be appointed to manage the various project packages.
Despite these concerns, JNPA’s Chairman remains optimistic about the project’s success. The port authority is committed to addressing potential issues and ensuring a smooth process for all stakeholders. The successful developer will be tasked with financing, executing, maintaining, and transferring the facility back to JNPA after the concession period. This development aligns with broader efforts to bolster India’s port infrastructure, with the total investment for the basic infrastructure at the new deep draft port estimated at Rs38,976 crore. The expansion of the Tuticorin VOC Port represents a strategic move to enhance the port’s capabilities and position it as a critical hub in the region’s maritime logistics network.
