The Hindu Business Line : PM inaugurates Sethusamudram project

The Prime Minister, Dr Manmohan Singh, inaugurating the Sethusamudram Ship Channel Project at a function organised in Vandiyur, Madurai on Saturday. Also seen are (from left) the Union Minister of Shipping, Mr T.R. Baalu, the DMK President, Mr M. Karunanidhi, the Congress President and UPA Chairperson, Ms Sonia Gandhi, the PMK Leader, Mr Anbumani Ramdoss, and the MDMK General Secretary, Mr Vaiko. — S.R. Raghunathan

Madurai , July 2

THE Prime Minister, Dr Manmohan Singh, on Saturday inaugurated the Sethusamudram Ship Channel Project works.

As he pressed a button at a function in the temple town, dredging began at Kodiakarai near Vedaranyam, about 300 km from here.

The Dredging Corporation of India, which has been awarded the contract for the 14-km stretch at this site by the Tuticorin Port Trust, the nodal agency for the execution of the Rs 2,428-crore project, started the work.

The project envisages dredging of a ship channel in the shallow portion of the sea to connect the Gulf of Mannar and the Bay of Bengal through the Palk Bay.

Dr Singh said the Sethusamudram project was one of the most ambitious projects to be conceived in the Indian port sector. It will reduce the travel time between the east and the west coasts of India and will particularly benefit small fishermen.

"I am certain the people of this region will, in a few years, see their lives transformed for the better by this project," he said. Dr Singh, however, urged project authorities to be mindful and respectful of nature and the maritime environment of the channel. "I am sure they will certainly do. We will make all efforts to preserve our natural heritage while implementing this project so that everyone's livelihood is protected. We will also protect the livelihood of fishermen," Dr Singh said.

In the 10th Five Year Plan, the Centre has set new and higher targets for improving the country's ports. "We want to encourage new investment in port development through a partnership between the public and private sectors. We welcome all forms of investment, public and private, in our ports. Over the next few years, we expect to see a major transformation of all our ports, large and small, for shipping or fishing," he said.

Now ships from the east to the west coast and vice-versa sail around Sri Lanka as there is a submerged reef - Adam's Bridge - near Rameswaram between the south-eastern coast of India and Thalaimanar in Sri Lanka. However, the channel will save a distance of up to 424 nautical miles (about 785 km) and 30 hours of sailing time. The Centre estimates foreign exchange savings of up to Rs 215 crore in the first year of operation (2008-09).

It is estimated to cost Rs 2,427.40 crore, consisting of a capital cost of Rs 2,233 crore and a financing cost of Rs 194.40 crore. Of this, Rs 971 crore will be equity whereas Rs 1,456 crore will be debt portion.

The Government of India's contribution in the equity will be Rs 495 crore, whereas Port Trusts of Tuticorin, Chennai, Ennore, Visakhapatnam, Paradip, Shipping Corporation of India and Dredging Corporation of India will together contribute Rs 250 crore. The remaining Rs 226 crore will be met through IPO/private placements.

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