Vadhvan Port Project Approved Changes to Attract Bidders and Reclaim Land in Maharashtra

The board of Vadhvan Port Project Ltd (VPPL) has approved changes to the Hybrid Annuity Model (HAM) to attract more bidders for the proposed Vadhvan port project in Maharashtra. They have also decided to reclaim approximately 1,200 hectares of land needed for the port in two phases. The modifications to the HAM, initially implemented in 2016 to boost investments in India’s highway development sector, focus on payment terms and structure.

A special purpose vehicle, VPPL, has been formed by JNPA and Maharashtra Maritime Board (MMB) with a shareholding of 74% and 26% respectively for the implementation of the port project. The modified HAM will be submitted to the Union Ministry of Ports, Shipping and Waterways and then to the Public Private Partnership Appraisal Committee (PPPAC) for approval. Once approved, bids for the project will be floated. The project involves reclaiming 1,227 hectares of land for the port and constructing an offshore protection bund at an estimated cost of ₹22,000 crore.

The land reclamation for the port project will be done in two stages over three years, reclaiming 850 hectares in Phase One and an additional 350 hectares in Phase Two. The construction period will be five years, with a fifteen-year concession period. 60% of the cost for reclaiming 850 hectares will be reimbursed within the first three years, with the remaining sum paid over the next ten years. Ten entities participated in an EOI for the project, including companies like Adani Ports and DP World.

The project will be financed by REC Ltd, Power Finance Corporation (PFC), and potentially by the World Bank and JICA. The exact funding required is yet to be determined through the bidding process. JNPA will provide ₹7,000 crore as equity, while the Maharashtra government is expected to contribute an additional ₹3,000 crore towards the project.

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