Chennai Port to revive outer harbour project for 3rd time, DPR to be prepared by June

The Chennai Port’s ambitious outer harbour project, which is set to be revived for the third time, will require nearly ₹10,000 crore. Its detailed project report is expected to be ready by June this year.

It is essential to execute this project, as the port aims at handling some of the world’s largest vessels, whose carrying capacity exceeds 20,000 TEU (twenty-foot equivalent unit).

Since the existing inner harbour has certain limitations with respect to draft and berth length, the outer harbour — planned with deeper draft and modern berthing facilities — will help handle such vessels.

The project, which will be implemented in a phased manner, also promises to increase capacity, improve logistics time, and reduce cost.

Recently, the Chennai Port Authority awarded a contract to a transaction advisor.

While a DPR was prepared many years ago, some parts of the document need to be revised. “The layout and other such aspects will remain the same. It is the cost and financial model that require modifications. Initially, it was estimated that the project would require nearly ₹8,000 crore, but the revised estimate stands at about ₹10,000 crore,” a source said.

The port is still finalising the financial model to implement the project. One of the reasons the project did not take off earlier was the huge investment it required from the firm securing the contract.

Hybrid Annuity Model

But now, the port is looking at the Hybrid Annuity Model, a public-private partnership framework. “If this model is approved by the Board, the port will pitch in 60% of the cost, while the remaining 40% will come from the firm,” another source said.

After this, the Chennai Port Authority must get environment clearance and approval from the Union government. Only then can the port call for bids for the project construction.