NEW DELHI: After failing to attract bidders for the ambitious Outer Harbour Container Terminal project at Tamil Nadu’s V O Chidambaranar (VOC) Port for over two years, the Centre has decided to restructure the project by splitting it into two parts, making the port authority responsible for building the core infrastructure.




The revised proposal with an estimated Rs 17,000 crore cost was taken up by the Union Cabinet last week, TOI has learnt. PM Narendra Modi had laid the foundation stone for the project in Feb 2024, with the expansion aimed at transforming VOC Port into a major transshipment hub on India’s east coast.




Once completed, the port will be capable of handling ultra-large container vessels of up to 24,000 twenty-foot equivalent units (TEUs) requiring an 18-metre draft. Such ships are over 400 metres long — roughly the length of four football fields.




The project was originally approved on a design, build, finance, operate and transfer (DBFOT) model in 2024 — a first such pure public-private partnership in which the concessionaire was to build the entire facility and operate it at an estimated cost of around Rs 7,000 crore. It was designed to handle vessels of up to 18,000 TEUs with a 16-metre draft. Traditionally, port authorities build common infrastructure while private operators invest in equipment and run terminals.




The port floated tenders twice, but prospective bidders flagged the project as financially unviable because of the high upfront investment required.




Now under the revised structure, common civil infrastructure will be developed by the port authority through the Hybrid Annuity Model (HAM) at an estimated cost of Rs 11,700 crore. Private concessionaires will invest about Rs 5,400 crore in mechanisation, terminal operations and other development works.




Officials familiar with the proposal said the restructuring also enhances capacity. While the original plan envisaged two terminals with a combined capacity of 4 million TEUs, the revised proposal increases this to 5.2 million TEUs.