Indian Government Funds Greenfield Maritime Projects Through State Ports and Maritime Development Fund

The Indian government is leveraging the financial resources of affluent state-run ports to establish new Greenfield facilities, such as those proposed at Vadhavan in Maharashtra and Galathea Bay in the Andaman and Nicobar Islands. This strategic move comes as the availability of budgetary support diminishes, prompting the government to seek alternative funding sources. Additionally, some of the funds from these ports will contribute to the proposed Maritime Development Fund (MDF), aiming to enhance maritime infrastructure in the country.

In the Union Budget for 2024-25, a total of Rs. 7 billion has been allocated for Sagarmala projects, which includes Rs. 6.6 billion for revenue and Rs. 0.4 billion for capital expenditures. Notably, the budget does not allocate any funds for the Sagarmala Development Company, which plays a critical role in the implementation of this ambitious initiative. The absence of funding for this company raises concerns about the pace and efficacy of maritime development efforts.

The financial strength of the 12 major government ports is significant, with cumulative cash reserves amounting to approximately Rs. 180 billion. In particular, the Deendayal Port Authority, Paradip Port Authority, Visakhapatnam Port Authority, and VOC Port Authority have been tasked with contributing funds for the development of an international container transshipment port at Galathea Bay. This project is expected to require an investment of over Rs. 400 billion, highlighting the scale and importance of enhancing India’s maritime capabilities.