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The Public Investment Board (PIB), a Finance Ministry assemblage that appraises ample nationalist investments, had connected August 2024 termed the projected International Container Transhipment Port (ICTP) astatine Galathea Bay successful Great Nicobar Island arsenic lacking successful “strategic objectives”.
At the August meeting, it had advised the Ministry of Ports, Shipping and Waterways (MoPSW) to see a strategical lawsuit into its proposal. A small implicit a twelvemonth later, the aforesaid task was formally notified arsenic a “strategic project” by the Ministry of Defence, according to records of a March 2026 gathering viewed by The Hindu.
The “strategic” quality of the projected ₹81,000-crore Great Nicobar Project, which consists of the ICTP, a township, airport, a gas-powered powerfulness works and a tourism zone, has been the Centre’s excuse, since astatine slightest 2022, for not making nationalist the contents of a study by a High Powered Committee (HPC) connected the cumulative biology interaction of the project. It has besides denied Right To Information requests connected biology clearances for the task connected the aforesaid grounds.
The PIB’s presumption surfaces successful records of meetings held connected March 17 and 19, 2026, by different Finance Ministry assemblage — the Public-Private Partnership Appraisal Committee (PPPAC) -- tasked with vetting task proposals worthy ₹500 crore and above, involving a concern with backstage players. The Hindu has viewed the PPPAC gathering records and reached retired to the Finance Ministry for comment, but hasn’t received 1 till property time.
The proposal, sponsored by the MoPSW with the Kamarajar Port Limited (KPL) successful Chennai arsenic the implementing agency, sought PPPAC clearance to physique the larboard successful 2 phases and crucially, support for ₹12,230 crore arsenic Viability Gap Funding (VGF) to marque the commercially marginal task bankable. VGF is simply a one-time assistance fixed to enactment infrastructure projects that are economically justified but autumn abbreviated of commercialized (financial) viability.
The PPPAC cleared the connection “unanimously” though it refused the VGF, recommending alternatively that the MoPSW usage its interior fund for the same. Earlier this week, Congress MP Jairam Ramesh wrote to Environment Minister Bhupender Yadav that “...the communicative connected the Great Nicobar Island Project has abruptly shifted… faced with incontrovertible grounds of its hugely adverse ecological impacts, the Union Government is present emphasizing its expected strategical rationale.” He added that “...the Great Nicobar Island Project arsenic presently conceived is overwhelmingly a commercialized enterprise”.
“Until the situation clearance (accorded successful November 2022) determination was nary existent notation by the Government of it being a strategical project… and adjacent past it was lone the airdrome (with civilian and subject use),” researcher and writer Pankaj Sekhsaria, who has extensively documented the biology menace posed by the project, told The Hindu. The ICTP is simply a important constituent of the overmuch bigger Great Nicobar Island Development Project and is simply a Ministry of Home Affairs initiative, with the Andaman and Nicobar Islands Integrated Development Corporation Limited (ANIIDCO) arsenic proponent of the wide task and holder of the biology clearance.
The 2021 documents that conceived the Great Nicobar programme and the January 2023 Expression of Interest for the larboard described it arsenic a means of capturing transhipment cargo presently routed done Colombo, Singapore and Port Klang, with the authorities estimating yearly overseas speech savings of astir $200 million, cumulatively reaching astir $1 cardinal by 2047.
In the past twelvemonth oregon so, the task has volubly been formed successful a maritime information lens -- centred astir the menace from China. Great Nicobar is situated adjacent the Malacca Strait, done which overmuch of China’s vigor imports pass, a vulnerability Beijing has called the “Malacca dilemma”. The task has hence been formed arsenic a counterweight to Chinese naval enlargement successful the Indian Ocean. This is an statement fixed caller impetus by the U.S.-Iran confrontation implicit the Strait of Hormuz and the renewed spectre of waterways being militarily dominated. Former Chief of Staff of the Integrated Andaman and Nicobar Command, Rear Admiral Sudhir Pillai, has called infrastructure built determination without a maritime doctrine “a level without a theory” portion erstwhile Navy Chief Admiral Arun Prakash has argued that the existing subject beingness tin beryllium reinforced without the ecological harm the task entails.
The PPPAC records besides amusement that contempt the eventual clearance, the gathering attendees, representing the Finance Ministry, NITI Aayog, and respective arms of government, questioned however the task would beryllium paid for earlier the committee cleared it.
The MoPSW had sought a bid of relaxations — support for VGF beyond the scheme’s 20% ceiling, the state to complaint market-determined tariffs, disbursal of the assistance connected an yearly ground earlier equity is afloat infused, and exemption from repaying 90% of the assistance if the task is terminated. These, the committee recorded, “constitute worldly deviations” not permissible nether existing rules and would necessitate explicit Cabinet approval. The committee concluded that the assistance was “not admissible” nether the Department of Economic Affairs (DEA) strategy and that the MoPSW “may see providing VGF/Capital assistance enactment done its ain budgetary support”.
The DEA besides asked wherefore VGF was needed astatine each erstwhile the sponsoring authorization would gain dividends and a gross share. The MoPSW responded that those net would statesman lone successful the 17th year, erstwhile the task reaches fiscal break-even, and VGF was meant to compensate for the risks it was bearing. The records enactment the project’s interior complaint of instrumentality astatine 13.30% and the equity interior complaint of instrumentality astatine 17.30%.
The committee besides questioned however the larboard would vie with the established hubs astatine Colombo, Singapore and Port Klang, and wherefore the 2nd signifier was to beryllium financed from interior accruals alternatively than caller equity — which the DEA said was “not a modular practice”.
Ultimately, the committee cleared a full estimated outgo of ₹48,862 crore — ₹27,793 crore for the archetypal signifier and ₹21,069 crore for the 2nd — implicit a concession play of 50 years, with operation periods of 60 months for sub-phase IA and 108 months for sub-phase IB. The larboard volition beryllium built by a associated task successful which an Indian-owned and controlled backstage entity holds 55% and prime large ports, including the KPL, clasp 45%.
The biology clearance for the task was granted connected November 11, 2022 successful the sanction of the Andaman and Nicobar Islands Integrated Development Corporation (ANIIDCO), from which onshore is to beryllium transferred to the KPL for the port.
