How Vedanta’s Goa port modernisation spurred a dubious Sagarmala investment

10 December 2018
Goa's Mormugao Port, near the town of Vasco da Gama, has been at the centre of controversies over its attempts to shift its product profile from iron-ore to coking coal.
Dinodia Photo
Goa's Mormugao Port, near the town of Vasco da Gama, has been at the centre of controversies over its attempts to shift its product profile from iron-ore to coking coal.
Dinodia Photo

On 25 March 2015, the union cabinet approved the Sagarmala programme— a flagship initiative of the Bharatiya Janata Party-led government, aimed at modernising India’s ports. The programme is expected to spur port-led economic growth by reducing logistics costs and encouraging port-oriented industrialisation. The following year, in July and August, the government finalised detailed master plans under Sagarmala for 12 of India’s major ports. This included the Mormugao Port Trust, or MPT, a major port near the town of Vasco da Gama, in Goa. Based on detailed assessments of the nature and quantities of cargo that the port can expect to handle by 2035—the target year for achieving Sagarmala’s objectives—the master plan for MPT recommended changes to the infrastructure and the facilities at the port in line with these projections.

However, my investigation into a port expansion project at MPT, envisioned under Sagarmala, indicates that the project is not backed by economic rationale. The project is barely viable as it will not serve any future growth in cargo and merely replace the existing facilities of the port, which presently appear sufficient for cargo growth up to 2035. The MPT’s attempt to couch the proposal as a project beneficial for fishermen has also been shot down by the community, many of whom say that it threatens the livelihood of traditional fisher folk. Fishermen along with local activists also claim that the project will cause irreparable damage to the regions’ ecology. The master plan and other port documentation reveal that the project has been justified for the sole purpose of clearing space at the port for the mining conglomerate Vedanta Resources to build its proposed coal and iron-ore terminal.

In April 2016, four months before the Sagarmala master plan was finalised, Vedanta Limited, a subsidiary of Vedanta Resources and one of the largest natural resources companies in the world, emerged as the winning bidder for a Rs 1,200-crore project at MPT. Its Design, Build, Operate, Finance and Transfer (DBOFT) project was slated to convert three of MPT’s eight active berths—designated spots in ports and harbours where vessels can dock or moor for loading and unloading—into a single terminal for iron-ore, coal and other dry bulk-cargo.

The berths identified for redevelopment under the Vedanta project were the petroleum handling facility at berth number eight, a 38-year-old iron-ore loading facility at berth nine and nearby barge berths. Notably, while berth nine and the barge berths needed to be upgraded, this was not the case with berth eight. For the year 2016, berth eight was handling 0.6 million tonnes of Goa’s annual domestic fuel demand of 0.78 million tonnes and was essential for the state. Inexplicably, its handing over to Vedanta for conversion to a dry-cargo bay happened without any plan put in place for the future of petroleum operations in the state.

Now, the MPT is proposing to undertake its biggest expansion yet, as a fait accompli to the Vedanta project. Under Sagarmala, port authorities planned to build three new berths—one liquid cargo berth; one multipurpose coastal cargo berth, for vessels carrying cargo from other Indian ports; and a multipurpose cargo berth, for all kinds of vessels. A fishing jetty and a passenger jetty have also been proposed on the other side of a concrete platform that will support the liquid and coastal cargo berths. The entire cost of this upgrade was pegged at Rs 680 crore.

Nihar Gokhale is a journalist covering environmental and corporate affairs. He is based out of Goa.

Keywords: Vedanta Mormugao Goa Sagarmala coal mining
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