JSW Infrastructure, the ports unit of the Sajjan Jindal-led JSW Group, signed the concession agreement on 29 November for the development of a greenfield port in Keni, Karnataka.
In regulatory filings with the NSE and the BSE, the company stated that the agreement had been signed between its subsidiary, Masad Infra Services Private Limited, and the Karnataka Maritime Board.
The Keni port is envisioned as an all-weather, greenfield, multi-cargo, direct berthing, deep-water commercial port capable of handling various types of cargo on the west coast in North Karnataka region to serve the industries in the area covering Bellary, Hosapete, Hubballi, Kalaburagi and South Maharashtra.
In September 2022, the state government invited global tenders for the development of the greenfield port at Keni on a design, build, finance, operate, transfer (DBFOT) basis.
JSW Infrastructure emerged as the sole bidder for the project, he first greenfield private port to be developed by Karnataka. The Karnataka Maritime Board, the government entity responsible for port development in the state, issued the Letter of Award to JSW Infrastructure on 16 November.
The second-largest commercial port operator in India proposed a royalty of Rs 17.25 per metric ton of cargo for the successful bid. According to the Karnataka Minor Port Land Allotment Policy, this royalty will increase by 2 percent each year. The “blended royalty” will be applicable irrespective of the cargo handled, including containers.
As per the RFP document, the estimated cost of the project is Rs 4,119 crore with an initial capacity of 30 million tonnes per annum (MTPA), expandable to 56.5 MTPA on demand.
The proposed Keni Port will feature modern, environmentally friendly mechanized facilities for handling cape-size vessels, which are large vessels unable to pass through the Panama Canal and must sail around the Cape of Good Hope and Cape Horn.
Interestingly, Keni Port will be strategically located between two operational major ports — Mormugao Port in the north and New Mangalore Port in the south.
The port’s hinterland primarily consists of coal and coke cargo, utilized for steel, cement, and power plants. It is also supported by the handling of iron ore, limestone, dolomite, and the export of finished steel products.
According to the Karnataka Maritime Perspective Plan, Karnataka currently has a hinterland potential of 44 MTPA of cargo, expected to increase to 117 MTPA by 2035. On comparison of the future demand and the capacity being handled by the present ports, there is a need for a deep draft port to fulfil the cargo handling gap requirement in future. Hence, the concept of development of the Port at Keni emerged.
Once developed, the Keni port is expected to crucially address the rising import and export trade momentum of the region.