Congress leader and Thiruvananthapuram MP Shashi Tharoor recently tweeted, “100 ships. One destination,” citing a news report to suggest that tensions around the Strait of Hormuz have redirected global shipping attention to his constituency. He noted the Vizhinjam International Seaport—India’s first deepwater container transshipment port—is witnessing a surge in activity, with around 100 vessels reportedly queued for berthing.
While there has indeed been a rise in demand for berthing, the claim that the port has become a “global necessity” may be overstated, particularly as it remains under development. The more pertinent question is whether Kerala—and India—may have missed an opportunity to capture additional foreign revenue, given that the port has yet to reach full capacity and the port-led logistics and industrial ecosystem around it remain in a nascent stage.
Demand-supply gap
Developed under a public-private partnership model, the port is owned by the government of Kerala and operated by Adani Ports and Special Economic Zone Ltd.
Sources indicate that disruptions in global shipping routes have led to a spike in berthing requests at Vizhinjam. However, capacity constraints have prevented the port from accommodating most of them. Following Phase 1, the port can handle only around 60 ships per month using its existing 800-metre berth—effectively allowing berthing for roughly two vessels per day, enabled by automated systems.
The port’s annual capacity is estimated at 1 million TEUs (Twenty-foot Equivalent Unit). Yet, in the last financial year—the first full year of operations—it handled 1.3 million TEUs, exceeding capacity by around 300,000 TEUs. Currently, the world’s largest privately owned container shipping line, Mediterranean Shipping Company (MSC), is the primary client, with berthing largely prioritised for its vessels.
Since tensions escalated around Hormuz, major global shipping lines such as Hapag-Lloyd, Evergreen Marine Corporation, and Maersk have reportedly sought berthing slots. These requests, however, could not be accommodated, largely due to existing commitments to MSC. With additional berths and yard space, this surge in demand could have translated into a significant revenue opportunity—one that now appears to have been missed.
At the same time, this unmet demand underscores Vizhinjam’s strategic importance and long-term potential as a major hub in global maritime trade. Although the Kerala government and Adani Ports signed the concession agreement in 2015, delays meant the port was formally commissioned for commercial operations only in December 2024. These delays led to arbitration, which was eventually settled, with a key condition being accelerated capacity expansion. Accordingly, the operator agreed to merge Phases 2, 3, and 4 and complete them by 2028.
However, with the port already operating beyond its designed capacity as a transshipment hub and demand continuing to rise, expansion is being fast-tracked. Sources say that construction plans have been reworked and are now being executed in sub-phases.
By the end of the phase 2 expansion, berth length has to increase from 800 metres to 2,000 metres. Under the revised plan, the first additional 400 metres—currently under construction—will be commissioned soon, taking the total to 1,200 metres. A further 400 metres will follow, meaning that an additional 800 metres could become operational well before 2028.
Misjudged potential?
Interestingly, even as port development gathers pace, murmurs persist that there has been little tangible economic benefit to host state Kerala so far. On the one hand, transshipment has enabled Vizhinjam to establish connectivity with more than 100 ports worldwide, integrating it into the global supply chain network. On the other hand, with operations still limited to transshipment, there has been no significant employment generation and only minimal tax revenue for Kerala.
In the first phase alone, the state government invested ₹5,595.34 crore. A senior official told THE WEEK that, beyond photo opportunities and social media posts, there has been little real gain so far. Given the scale of public investment, returns in terms of tax revenue remain negligible.
Crucially, for Kerala to benefit meaningfully, the immediate priority is to build a port-led logistics and industrial ecosystem around Vizhinjam. However, experts note that this aspect has not received adequate attention over the years. “In fact, policymakers may not have anticipated that the port would achieve this level of success,” said an official. Unlike typical port cities, Vizhinjam is essentially a fishing village where a project of unprecedented scale is coming up, and significant government intervention is needed to attract investors, experts say.
Importantly, EXIM operations have yet to commence at the port. While the operator has developed a dedicated road link to the national highway—originally a government responsibility—final customs clearance is still pending. Once approvals are in place, EXIM operations are expected to begin, possibly as early as next month, albeit on a limited scale.
For now, this remains a temporary arrangement. Without full railway connectivity and a comprehensive road network, Vizhinjam’s EXIM potential will continue to be constrained.
Notably, port-led development ran into multiple bottlenecks due to bureaucratic delays. The state government’s nodal agency, Vizhinjam International Seaport Limited (VISL), which operates under the Ports Department, received its mandate to attract investors—by facilitating land acquisition, promoting opportunities, and onboarding investments—only a month ago.
In Kerala, the mandate for industrial development traditionally rests with the Industries Department and its agencies, such as the Kerala State Industrial Development Corporation (KSIDC) and KINFRA. Until recently, VISL had no formal authority in this domain.
“We have been trying for nearly one and a half years to secure this specific mandate. We finally received it just hours before the Election Commission announced the model code of conduct,” a senior VISL official said. The official added that while Vizhinjam has the potential to become a “gold mine” for the state, the absence of a supporting industrial and logistics ecosystem remains a major gap, underscoring the need for active government facilitation.
Although the government had proposed an Outer Area Growth Corridor (OAGC) from Vizhinjam to Navaikulam to build a port-led industrial ecosystem—with the Outer Ring Road as its backbone—little progress has been made. Despite detailed reports being prepared 6–7 years ago, officials say the plan has seen no meaningful traction.
Land troubles
A key bottleneck in developing the industrial ecosystem around the port is land availability. Potential investors looking to acquire land in Thiruvananthapuram district—especially near the port—face inflated prices. Recently, a UAE-based group attempted to acquire land directly from individual owners in the port’s vicinity. The project requires around 50 acres, with negotiations involving over 200 landowners. However, a section of owners has held out, seeking higher prices, thereby slowing progress.
VISL itself faces challenges in land acquisition, with instances of price manipulation further driving up costs. With the funds currently available, the agency expects to acquire around 300–400 acres, but high demand and escalating land prices remain significant hurdles. State government intervention and facilitation in this regard have, so far, been limited.
“In this context, we cannot focus only on land near the port—we need a more balanced approach,” said a VISL official.
In February, the Kerala government signed MoUs with three central public sector undertakings—IOCL, CONCOR, and CWC—to roll out a ₹2,000 crore logistics master plan at Vizhinjam. VISL says land has already been identified for Indian Oil Corporation’s bunkering project. An MoU has been signed with Container Corporation of India (CONCOR) to set up a multimodal logistics park, for which about 25 acres is currently required, with more needed in the future. The Central Warehousing Corporation (CWC) plans a 50-acre logistics park near railway connectivity. Officials said these agreements were signed ahead of the elections to ensure early progress, noting that working with central PSUs also eases approvals.
A 10.7-km railway tunnel is planned from Vizhinjam to Balaramapuram, of which 9 km will run underground. The tunnel will originate from the Karimpallikkara side of Vizhinjam and run parallel to the Vizhinjam–Mukkola–Balaramapuram road. The project, estimated to cost around ₹1,500 crore, is to be executed by Konkan Railway Corporation.
However, the underground rail project has progressed slowly due to official delays. Concerns among local residents that the tunnel could damage their homes remain a key challenge. “We have discussed this with local communities, and some resistance remains. But resolving this is essential for bringing rail connectivity to the port,” an official said.
