The Kerala government has announced a 35-year waiver on its share of revenue from the Azhikkal Port, which is under development in Kannur. This minor riverside port is set to evolve into a significant greenfield port as part of the Sagarmala Programme, a major initiative by India’s Ministry of Ports, Shipping, and Waterways. The transformation will occur in three phases, with the state-owned Malabar International Port and SEZ Limited (MIPS) playing a pivotal role.
To facilitate this development, the state government plans to invest Rs 3,000 crore for the initial phase and will refrain from collecting revenue for 35 years, which includes five years of construction and 30 years of operation. This strategy aims to enhance the project’s financial viability for private investors, as indicated in a report by Maritime Gateway. Officials noted that the previous requirement for private partners to share revenue from the outset was hindering progress, given the project’s substantial investment demands.
The 35-year revenue holiday is expected to attract more private partners, ensuring timely execution under the Public Private Partnership (PPP) model. However, the state’s request for Viability Gap Funding (VGF) from the Central government remains uncertain, particularly after funding was already allocated for Thiruvananthapuram’s Vizhinjam Port.
Once fully operational, Azhikkal Port will feature a depth of approximately 14.5 meters, enabling it to accommodate larger Panamax vessels with a capacity of around 4,500 TEUs. It will include one 500-meter berth and two 300-meter berths. Beyond maritime activities, the project is poised to stimulate industrial growth in the Malabar region, with plans for associated industrial parks and Special Economic Zones (SEZs).
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