Finally, after several attempts, the port's outer harbour project is set for take off.

The project, crucial to support Tamil Nadu's industrial growth, economic activities, and increased demand for transshipment facilities, has been revived with the appointment of the transaction advisor. A revised detailed project report (DPR) will also be prepared soon, sources say. 

Chennai-Bengaluru Industrial Corridor

With the Chennai-Bengaluru Industrial Corridor (CBIC) expected to accelerate manufacturing in the States of Tamil Nadu, Karnataka, and Andhra Pradesh, along with developing a premier manufacturing ecosystem, cargo movement becomes crucial. Chennai Port is a critical hub for EXIM (export-import) activities in the industrial zones of Chennai, Sriperumbudur, and Oragadam, and other parts of Tamil Nadu.

Further, by 2030, India's container traffic is also expected to witness 6% to 10% growth. With rapid infrastructure development, improved multi-modal transportation, and cost efficiency, the country's containerisation (the process of unitising cargo for export) rate is also set to increase in the coming years. 

The 20.6-km elevated Chennai Port–Maduravoyal corridor is also scheduled for completion by 2027. The elevated corridor is expected to improve the movement of cargo and facilitate seamless connectivity. 

In this context, an outer harbour at the Chennai Port is more of a prerequisite than an add-on infrastructure. At present, even major ports face several challenges in docking mother/mega vessels from other countries.

Not only can the proposed mega terminal boost the port's efficiency, but also leverage Chennai's strategic location on the East Coast, connecting South Asia and Southeast Asia through transhipment, serving as a catalyst for regional economic growth. 

According to sources, Kamarajar Port Limited, located about 20 km north of Chennai, has also been envisaging a similar outer harbour project to expand its terminals to boost the cargo volume. 

PPP Model

The development comes in the wake of the Chennai Port aiming to completely transition itself to the "Landlord Model" in a phased manner, by privatising its berths for operations and, thereby, optimising its capacity utilisation.

In 2007, the Chennai Port had chalked out a proposal to develop a mega container terminal under the public-private partnership (PPP) model to handle large container vessels. Tenders were called in 2011, 2012, and 2013, respectively. However, the response was suboptimal. 

In 2013, the project was reenvisioned as the "Development of Outer Harbour Project at Chennai Port," but it again faced undue delays.

According to officials, the mega project, estimated at about ₹10,000 crore, should be completed before the contracts of the two private enterprises handling the two terminals at Chennai Port expire. The contract of DP World, which handles the port's first terminal, is set to expire in 2031, while the contract of PSA International expires in 2037.

DPR, Environmental Clearance

The bidding process for the project will likely start in two years, following the DPR preparation and environmental clearance, officials said. 

The mega terminal project was named "Outer Harbour" as port authorities have been exploring the waterfront to further develop its infrastructure. 

An outer harbour/mega terminal is a vital infrastructure component for major ports to improve operational efficiency, enhance logistics, and, most of all, dock mega vessels. 

Though the total capacity of the two container terminals at the Chennai Port is 3.1 million twenty-foot equivalent unit (TEU), the real capacity reduces to about 2 TEU due to limited yard capacity, and logistics and infrastructure constraints.

Available Water Depth

The available water depth (draft) at a port is the primary factor that determines its ability to dock massive vessels. The Cochin Port, for instance, has an average draft depth of 14.5 metres, while the Vizhinjam Port, in contrast, offers a deep draft of about 25 metres. 

Currently, the Chennai Port offers a maximum draft depth of up to 16 metres. "With the new terminal, the deep draft depth will go up to 20 metres. Moreover, large foreign vessels with up to 18,000 TEU can be berthed at the port," says K. Srinivasan, Senior Deputy Director, Planning & Research, Chennai Ports.

Container Value

The new terminal will significantly improve the container value, bring in more revenue, and reduce logistics costs

— Port official

Last year, the largest container vessel docked at the Chennai Port was APL Boston (328.2 m), while Desh Shakti (about 17 m) was the vessel with the deepest draft that was berthed at the port. 

According to a report by the Indian Ports Association, the country requires "mega ports" to dock massive vessels, and about 16-metre deep drafts would also become a prerequisite, as 40% of the future fleet order book comprises ships of 20,000 TEU capacity or more.