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DP World’s Ambitious Investment Plans Transform Gujarat’s Logistic Landscape

DP World's Ambitious Investment Plans Transform Gujarat's Logistic Landscape

DP World’s Ambitious Investment Plans Transform Gujarat’s Logistic Landscape

In a significant development for the logistics sector in Gujarat, Dubai-based DP World has pledged a whopping Rs.24,000 crore investment in the state. The commitment encompasses the development of various logistic facilities, including the ambitious proposal to construct a mega multi-commodity deep draft port at Nargol in South Gujarat. This move is part of DP World’s strategic collaboration with the Gujarat Maritime Board (GMB), a key state government agency overseeing the development of ports and port-led infrastructure.

Official sources within the GMB confirmed the signing of six Memorandum of Understanding (MoUs) between DP World and GMB earlier this month. These agreements mark a crucial step in the run-up to the 10th edition of the Vibrant Gujarat Summit, scheduled for January 10-12, 2024. The collaborative efforts outlined in the MoUs underscore DP World’s commitment to playing a pivotal role in Gujarat’s economic growth and positioning the state as a hub for global trade and logistics.

Under one of the MoUs inked in December 2023, DP World has proposed a monumental investment of ₹10,000 crore for transforming Nargol into a “mega multi-commodity deep draft port.” The state government envisions Nargol as a prospective alternative to the established Jawaharlal Nehru Port (JNPT) in Mumbai. This strategic move aligns with Gujarat’s ambitions to bolster its maritime infrastructure and enhance its role in the global trade landscape.

In addition to the Nargol project, DP World has committed to investing Rs.5,000 crore in the development of a multi-purpose deep draft port in Kutch and another Rs.2,000 crore for a similar project in the Jamnagar district of Gujarat. While these investments are substantial, an official from GMB clarified that DP World’s proposals also include expanding its existing facilities within the state.

DP World has a history of active involvement in Gujarat’s logistics landscape, operating an international container terminal at Mundra in Kutch since 2003. The company further extends its footprint with inland terminals at Ahmedabad and Hazira near Surat. Despite attempts to reach DP World for comment, the company has not provided a response at the time of reporting.

Expanding its scope beyond ports, DP World’s investment portfolio in Gujarat includes a proposed Rs.2,000 crore Free Trade Warehousing Zone (FTWZ) at Kandla in Kutch district. Additionally, the company has earmarked an additional Rs.5,000 crore for the development of the Tuna Tekra container terminal in Kutch district. DP World formalized its commitment to the latter through a concession agreement with Deendayal Port Trust (DPT) in August.

The backdrop of Gujarat’s port development efforts traces back to 1997 when the government initiated plans for a port in Valsad district. Originally proposed at Maroli, located approximately 10 kilometers away from Nargol, the greenfield port project faced setbacks. In 1998, the development rights were awarded to an Indo-US consortium, Unocal Corporation, and Mumbai-based National Telecom of India Ltd. (Natelco), backed by a minority stake from GMB. However, public protests resulted in the project’s shelving.

Nargol emerged as an alternative location, and in 2012, GMB granted a Letter of Intent to a consortium comprising Ahmedabad-based Cargo Motors Pvt Ltd and Amarillis, the international arm of Israel Port Company. Despite these efforts, the project failed to materialize, leading to its cancellation by the government in July 2019. Public protests reignited in Nargol in 2021 when the Gujarat government announced plans to invite global bids for the port, situated around 140 kilometers north of Mumbai and 120 kilometers south of Surat.

The current proposal envisions the development of the Nargol port under the Public-Private Partnership (PPP) model, with the government extending the Build-Own-Operate-Transfer (BOOT) period from 30 to 50 years in 2021. This long-term commitment aims to attract private investments, foster sustainable growth, and position Gujarat as a key player in India’s maritime and logistics sector.

In conclusion, DP World’s substantial investment in Gujarat reflects a pivotal moment in the state’s ambition to become a logistics and trade powerhouse. The strategic partnerships outlined in the MoUs have the potential to reshape Gujarat’s maritime landscape, offering economic benefits, employment opportunities, and positioning the state as a key player in the global logistics arena. As the Vibrant Gujarat Summit approaches, the collaboration between DP World and the Gujarat Maritime Board signals a promising chapter in the state’s journey toward sustainable economic development and global prominence in the logistics sector.

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