Karaikal Port Reloaded

The young port hugging the coast of Coromandel, within a short span of less than a decade had its share of early success and agony. But in the last two years it had scripted a turnaround story registering healthy cargo growth and putting a point that it is too early to write it off.

- Sisir Pradhan

Fast paced industrial and economic activities of Tamil Nadu have resulted in establishment of a number of supercritical thermal power plants in the state. Being high volume coal guzzlers, these power plants have been the backbone of deep draft ports in the state as principal users. Nestled between two major ports Chennai and V.O. Chidambaranar Port, Karaikal Port has benefitted from the thermal power projects such as Cuddalore IL&FS thermal power plant. Apart from which, Karaikal is closest to central Tamil Nadu districts like Trichy, Namakkal, Salem, Karur, Tirupur Pudukkottai, Erode and Ariyalur which are traditionally vibrant with commercial activities.

Around this time in 2016, the market was abuzz with reports of Karaikal Port in look out for buyers and for long time there was news of some or other investor looking to pick up stake in the port project, including Shapoorji Pallonji Group. Investments in port sector has always been a tricky affairs for even the most seasoned investors as these capital intensive infrastructure projects are perfect ramification of chicken and egg connotation. It was the year 2009, when Karaikal was called operational and the investors were confident about the potential of the prosperous central and southern Tamil Nadu generating enough cargo for the port. All assumptions were put to rest within a year of its commissioning with the port announcing India Infrastructure Fund’s investment plan of `1,500 million into equity share capital towards the Phase II expansion,which followed by some more equity investments in subsequent years. During FY2011-12, the port handled 6.01 million tonnes of cargo as compared to 4.75 million tonnes in FY2010-11 registering a Y-o-Y growth of 26.53 per cent.

The Fall and Rise