Mega Transhipment Hub at Galathea Bay: Project Overview
India is set to develop a Mega International Container Transhipment Port (ICTP) at Galathea Bay on Great Nicobar Island, as part of the country's Holistic Development of Islands program. The project aims to bridge the gaps in infrastructure and improve economic opportunity for rapid increases in the size of all types of vessels, from feeders to large inter-continental carriers. The port will have a capacity to handle 16 million containers per year, with the first phase expected to handle more than four million containers annually. The project is expected to be completed with an investment of INR 41,000 crore (USD 5 billion) from both the government and private concessionaires.
The proposed port will have several other projects planned around it, including an airport, township, and power plant. The holistic development of the islands aims to provide service levels and facilities that match those of the world's top container transhipment terminals and neighboring ports.
The project's strategic location on the International Trade Route, with existing transhipment terminals like Singapore, Klang, and Colombo in proximity, provides a natural depth of 20m and a potential to capture transhipment cargo from similar international facilities in the sub-continent and ports in the proximity, including Indian ports. Experts have long maintained that a strong economic case exists for enabling a transhipment hub in India that can attract Indian and regional transhipment traffic, save significant revenue loss, reduce logistics inefficiencies for Indian trade, reduce risks to the country's export competitiveness, and create an opportunity for India to become a large hub for Asia-Africa and Asia-US/Europe container traffic trade.
Currently, nearly 75% of India's transhipped cargo is handled at ports outside India. Colombo, Singapore, and Klang handle more than 85% of this cargo, with 45% of this cargo handled at Colombo Port. Indian ports can save $200-220 million each year on transhipment cargo. Additionally, developing Galathea Bay Transhipment Port will accrue significant benefits, such as forex savings, foreign direct investment, increased economic activity at other Indian ports, enhanced logistics infrastructure and thus efficiencies, employment generation, and increased revenue share. Several other allied businesses, including ship chandlery-ship supplies, ship repair, crew change facility, logistics value-added services, warehousing, and bunkering, are also planned at this transhipment port.
The proposed facility is envisaged to be developed in four phases, with the total estimated cost of INR 41,000 crore. Phase 1 is proposed to be commissioned in 2028 with a handling capacity of approximately 4 million TEUs, increasing to 16 million TEUs in the ultimate stage of development. The estimated cost for Phase 1 of the proposed transhipment port is around INR 18,000 crore, which includes the construction of breakwaters, dredging, reclamation, berths, storage areas, building and utilities, procurement and installation of equipment, and development of the port colony with core infrastructure that will be developed with government support.
The government plans to encourage Public-Private Partnership (PPP) for this project via the landlord mode. The PPP concessionaire shall have the flexibility to develop storage area, container handling equipment, and other infrastructure based on their own market and business assessment, subject to the Minimum Guaranteed Traffic. The concessionaire would be awarded a long-term PPP concession of 30 to 50 years (based on the requirement), shall be responsible for the provision(s) of port services, and shall have the rights to levy, collect, and retain charges from port users.