V.O.CHIDAMBARANAR PORT TRUST
TUTICORIN – 628 004
Development of a New Major Port at Enayam in Tamilnadu
Brief Note
May,2017
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Development of aNew Major Port at Enayam in Tamilnadu
Brief Note
Introduction
Container traffic in India has seen tremendous growth in the last decade.
The traffic has grown by more than 10% CAGR. The traffic is expected to continue growing
at this rate as the global economy recovers and India's GDP growth rate accelerates back
to 7 – 8% YoY growth. The demand for container traffic can further accelerate if the plans
for improving logistic infrastructure are implemented and the 'Make in India' push drives
greater exports and manufacturing outsourcing to India.
Indian Ports handled about 11.3Mln.TEUs of container cargo in 2016-17 of which,
7.7 Mln.TEUs of container cargo was gateway and 2.90 Mln.TEUs was transshipped enroute
to destination. Currently, all of India’s transshipped also gets handled in Ports outside of
India. Colombo, Singapore and Klang handle 80% of this cargo, while Colombo alone
handles around 1.20Mln.TEUS mostly generated in South India. Because of this, Indian Port
industries loses out up to Rs.1500Cr each year on transshipment handling of cargo
originated /destined for India. At present, there are no Ports in South India have sufficient
draft (16m), scale and can match global cargo handling efficiencies to function as a
transshipment hub. Hence, a transshipment Port in South India will be an immediate
necessity to benefit Indian Port Sector and India’s EXIM trade.
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Hence, the Ministry of Shipping (GOI) took initiatives to identify a suitable site
and assess the feasibility of developing a new container transshipment Port in the
Southern Coast of India near Colachel at Kanyakumari District. The prime advantage of
Enayam site is the availability of deep waters closer to shoreline (20m depth at a distance
of about 1.5 to 2km from the shoreline).
Preparation of Techno-Economic Feasibility Report (TEFR)
Development of a deep–sea Port at Colachel was a long felt need for the economic
upliftment of the Southern districts of State of Tamilnadu and more particularly the
industrially backward district of Kanyakumari.
Earlier, Government of Tamilnadu had undertaken Techno-Economic Feasibility
Studies for development of Colachel Port in the years 1998, 2000 and 2010, to support the
industrial growth in Southern Tamilnadu. Ministry of Shipping re-activated the project in
the year (2015) and got another Techno Economic Feasibility Report prepared by
M/s.TYPSA-BCG, an International renowned Spanish Consultant for the development of
Colachel Port leveraging the availability of deeper depth closer to the shoreline.
This Report was received in August, 2015. This report found that development of a deep
Sea Port at Enayam near Colachel to handle larger Container vessels up to 18,000 TEUs
capacity with 16m draught is technically feasible and financially viable.
In order to select the most optimal site for port development, an exhaustive study
of the region has been conducted by the TYPSA-BCG consultants and four sites have been
selected for detail evaluation – Kanyakumari, Manavalakurichi, Colachel and Enayam
Amongst the four options, Enayam (westward to Colachel) emerges as the best
option on the basis of its stable coastline, availability of 20m depth closer to shore, ease
of construction and expansion, connectivity, environmental issues and maintenance etc.
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Preparation of Detailed Project Report (DPR)
On submission of the Final Techno-Economic Feasibility Report, the Ministry of
Shipping has decided to prepare the Detailed Project Report for Development of Colachel
(at Enayam) by firming up and further developing the TEFR.
VOCPT initiated tendering process and selected TYPSA Consultants for preparation
of DPR through competitive bidding (LOA - 23.12.2015). The Consultants have taken up the
assignment and the study is in progress. The DPR is expected to be ready by the end of
September, 2017. A separate study for Road and Rail Connectivity to the proposed Port has
been entrusted to M/s.RITES Ltd by the Ministry. The survey/study is in progress.
Traffic Potential of Colachel Port
A detailed traffic modeling and analysis has been made in the TEFR to arrive the
traffic estimates of Colachel Port. Containers are expected to be the traffic drivers for
Colachel Port followed by coal. Colachel Port has been proposed with the objective to
capture Containers that today get transshipped through Colombo and other transshipment
hubs. Besides container traffic, Coal traffics driven by the demand from thermal power
plants. Power plants already planned in the region and the new captive power plant will
generate Coal traffic through Colachel Port in course of time.
Summary of Traffic Estimate
Container Cargo
Base Case
Gateway
Trans-shipment
Total
units
in Mn TEU
in Mn TEU
2020
1.0
0.7
1.7
2025
2.1
2.8
4.9
2030
2.9
3.9
6.7
2035
3.9
5.2
9.1
2040
5.0
8.0
12.9
units
in Mn TEU
in Mn TEU
2020
1.1
0.9
2.0
2025
2.4
3.5
5.9
2030
3.4
5.2
8.6
2035
4.7
8.8
13.5
2040
5.8
13.1
18.9
units
in Mn TEU
in Mn TEU
2020
0.9
0.5
1.4
2025
1.6
2.0
3.5
2030
2.1
2.6
4.7
2035
2.8
3.3
6.1
2040
3.7
4.2
7.8
units
in Mn MT
in Mn MT
in Mn MT
2020
6.6
-
2025
3.3
23.1
-
2030
6.6
26.4
-
2035
9.9
29.7
-
2040
9.9
29.7
-
Aggressive Case
Gateway
Trans-shipment
Total
Conservative case
Gateway
Trans-shipment
Total
Bulk Cargo (Coal)
Base Case
Aggressive Case
Conservative Case
Brief details of the Project
The Proposed Port is located near Enayam about 8 km north west of Colachel at
Kanyakumari District. The proposal envisages construction of breakwaters, dredgingreclamation, Container berths with provision for addition of Multi-purpose/dry bulk berths.
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The draft at the harbour is proposed at 16m capable of handling 18000 TEU capacity
Container vessels and cape size Coal vessels. Construction of the Port will be in the sea
side over the area generated by reclamation using the dredged materials.
Layout (All Phases)
Layout ( Phase-1)
Enayam (site for Colachel port) will be linked by a combined road (six lane) /rail
(double track) corridor to the proposed Port will be by branching off from NH-47 and
Trivandrum-Nagercoil BG line at Palliadi station respectively. The Study is being
undertaken by RITES.
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The Port development has been planned in three phases and the details of the Port
configuration for all three phases is summarized as below:
Description
Container Berth
Capacity
Solid dry bulk
Capacity
Berths (total)
Overall Capacity
Project Cost
Phase-I
Phase-II
Phase-III
Total
(2017-20)
(2021-25)
(2026-30)
(2017-2030)
m
800 (2Nos)
2000 (5Nos)
1,200 (3Nos)
4000 (10Nos)
MlnTEU
1.60
4.02
2.41
8.03
MTPA
24
60.30
36.15
120.45
m
-
400 (1No)
400 (1No)
800 (2 Nos)
MTPA
-
3.30
3.30
6.60
m
1,400 (4Nos)
2,400 (6Nos)
1,600 (4Nos)
5,400 (14Nos)
MTPA
24
63.60
39.45
127.05
INR in Cr.
6,575.20
11,536.90
9,457.90
27,570
Unit
The project will be implemented in three Phases at a total cost of
Rs.27,570Crore covering a period of 2017-2030. The estimated cost for Phase-I
development is Rs.6,575.20Crore and capacity addition is 24 MTPA (1.60 Million TEUs).
Union Cabinet accorded In-Principle approval for Development of a New Major
Port at Enayam in Tamilnadu.
Financial Feasibility

Construction Cost (Phase-1)
: Rs.5840 Cr

Overall Project Cost (Phase-1)
: Rs.6,275 Cr

Project IRR
: 10.80%

Equity IRR
: 11% (for Debt equity ratio of 70:30)
 The Project IRR of 10.8% is more than WACC of 10.60%
 The Equity IRR of 11% for Enayam Port is higher than the return of 8-9%
received by the major ports on a sizeable portion of their investments
Implementation Strategy
Enayam Port is proposed to be developed as a Landlord Port, wherein, the Port
Authority will make an investment of Rs.3,185Cr by forming a SPV on construction of
Breakwaters, Dredging and Reclamation and the balance Rs.3,046 Crores will be under
Private Sector investment for the development and operation of Container Terminals
(PPP Mode).
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Formation of SPV
A Special Purpose Vehicle (SPV) is proposed to be formed for development of
Enayam Port with initial equity investment from the three Major Ports in Tamilnadu VOC Port Trust, Chennai Port Trust, Kamarajar Port Limited. The share of initial equity by
each Port will be decided in due course.
Project Benefits:
 Enayam Port will become the first transhipment port of India and facilitate
direct shipment of containers to overseas destinations avoiding transhipment of
about 1-2 Mln.TEUs of Indian Containers through Colombo Port . This would save
the transhipment handling costs of about Rs.1500Crores per year to the Indian
Port industries.
 The Port would offer an efficient and cost effective service and promote EXIM
Trade in the region. This could trigger a new set of opportunities as induced
developments.
 Routing of EXIM containers through Enayam Port will avoid additional charge of
Rs.5000-6000 per TEU to the Exporters/Importers in South India and will make
the exports competitive.
 The Port will create an opportunity to develop major industries in and around the
Port and the region of Kanyakumari District. This would lead in creation of more jobs
and will provide a major boost to the local economy.
 The possible industries include Thermal power stations, manufacturing industries to
support shipping activities, shipping related services and other ancillary industries
can be developed in the proximity to the Port area.
 The Port will promote trade and economic activities.
 Employment opportunities will be generated to the local people in skilled,
semi-skilled and unskilled work force during the construction and operation
phases.
Project implementation Timeline
On finalization of the DPR by the end of September, 2017, the tender process
will start for construction of Breakwaters & Dredging. Simultaneously, action will be
taken for selection of Private Operator under PPP mode for development and operation
of Container Terminal (800m).
The major marine works are expected to start by May, 2018 and the first
container terminal is expected to be commissioned by end of 2020.
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