The Vadhavan Port, a major greenfield deep-draft container port project at Palghar in Maharashtra, is being developed as India's first offshore mega port on reclaimed land in the Arabian Sea. Situated approximately 150 km north of Mumbai, the port is projected to achieve a total capacity of 23-24 million TEUs annually upon full completion (Phase 1 and Phase 2, expected to be completed by 2035).
Vadhwan is expected to alleviate the congestion at nearby ports like Jawaharlal Nehru Port Authority (JNPA) and boost trade efficiency by reducing logistics costs and transit times. The overall project cost, including land acquisition, core infrastructure (breakwaters, dredging, reclamation), terminals, and connectivity, is ₹76,220 crore.
The Jawaharlal Nehru Port Authority (JNPA), which holds a 74 percent stake, is a key entity responsible for building the Vadhavan Mega Port, whose first phase of the project is estimated at ₹40,000 crores. At THE WEEK Maritime Summit held in Kochi, Girish Thomas, Chief Manager (Traffic), Jawaharlal Nehru Port Authority, explained how such a large project is being financed. “The overall financing structure is 30% equity and 70% debt. That is how the project has been conceived,” said Thomas while talking in the session Modernising India’s Gateways.
In the first phase, which is expected to be completed before 2030, four terminals will be developed at Vadhavan. Notably, since Vadhavan is an offshore megaport, 1,227 hectares in the Arabian Sea will be reclaimed to create an artificial island.
Thomas noted that the other critical infrastructure, including shore protection, land, connectivity, and the breakwater (10.14 km long), is also to be built before finding an operator. “For the breakwater, the government has decided this will be done on an EPC basis. The port will invite tenders and award contracts worth about ₹3,500 crores, which will be financed through loans,” said Thomas.
“For land reclamation, shore protection, and dredging, the model chosen is HAM (Hybrid Annuity Model)—the same model that has been very successful in highway projects. Under HAM, a private party develops the infrastructure and receives annuity payments from the port over a long term. The port, in turn, recovers the cost through vessel charges and other levies. This component comes to around ₹20,500 crores.”
Thomas added that for connectivity to Vadhavan, rail infrastructure is being funded by Indian Railways, roads by NHAI, water supply by Maharashtra Jeevan Pradhikaran (MJP), and electricity by the State Electricity Board. “So, with government support, the basic infrastructure—breakwater, reclamation, shore protection, dredging, and connectivity—will be in place,” he said. “After that, the terminal operators who win the tenders will develop their own facilities—quay walls, cranes, yards, and all other operational infrastructure.”