JSW Infra wins bid to develop Keni port in Karnataka for $495 million

JSW Infrastructure will develop a commercial port at Keni in Karnataka on a public-private-partnership basis at a cost of $495 million, the company said. 

The ports arm of Sajjan Jindal-led JSW Group said in a statement that it had received a letter of award (LOA) for the development of the Keni greenfield with an initial capacity of 30 million tonnes per annum (mtpa).

The Karnataka Maritime Board issued the LOA to JSW Infrastructure after it emerged as the winning bidder for the port in Uttara Kannada district. The estimated cost of the project is ₹4,119 crore ($495 million), the company said. 

The proposed port would have modern, environment-friendly mechanized facilities for the handling of cape-size vessels. It is envisaged as an all-weather, greenfield, multi-cargo, direct berthing, deep-water commercial port for handling all types of cargoes on the west coast in northern Karnataka, serving the industries in Ballary, Hosapete, Hubballi, Kalaburagi, and southern Maharashtra. 

The initial capacity at the port will be 30 mtps, with the potential to raise substantially in the long run, the company said. 

“Once developed, the Keni port is expected to crucially address the rising import and export trade momentum of the region,” Arun Maheshwari, joint managing director and chief executive of JSW Infra, said.

The proposed port is located between two major ports—Goa’s Mormugao in the north and New Mangalore Port (NMPA) in the south. Rail connectivity to the site, with an 8km alignment, is proposed to be on the southern side and will be connected with the existing Konkan line to the north of Ankola station, the company said. 

In 2022, Karnataka sought bids to develop ports at Keni and Pavinakurve in a move aimed at bolstering infrastructure. Media reports said earlier this year that JSW Infrastructure had emerged as the lone bidder to develop the port.

Business Standard reported that four parties participated in the pre-bid stage—JSW Infrastructure, Adani Ports and Special Economic Zone, Navayuga Engineering Company, and Vishwa Samudra Engine­ering. Despite qualifying for bidding, Adani Ports chose not to bid, leaving JSW as the sole bidder. 

“Once the concession agreement is signed, we will start working to develop the port as an integral part of the state’s maritime infrastructure and trade gateway,” Maheshwari said. 

“Through the development of this greenfield port, we are partnering with the Karnataka government’s mission to meet the logistics demand of a rapidly growing state and the region’s economy,” he added. 

The proposed Keni port’s hinterland is primarily of coal and coke cargo which is being utilized for steel, cement, and power plants, the company said, adding that it is further supported by iron ore, limestone, dolomite handlings, and export of finished steel products. 

As per the Karnataka Maritime Perspective Plan, Karnataka currently has a hinterland potential of 44 mtpa of cargo, which is expected to increase to 117 mtpa by 2035.

“In comparison to the future demand and the capacity being handled by the present ports, there is a need for a deep draft port to fulfill the cargo handling gap requirement in the future. Hence, the concept of an alternate port for NMPA has emerged, which aims at the development of the port at Keni,” JSW Infra said.

JSW Infrastructure is India’s second-largest commercial port operator in terms of cargo handling capacity. During the quarter ending September, the company handled cargo volumes of 23.7 mt, 27% higher than it did during the same period last year. 

Its revenue in the quarter grew 29% year-on-year (y-o-y) to ₹895 crore ($107 million), and it recorded an Ebitda (earnings before interest, taxes, depreciation, and amortization) of ₹499 crore ($60 million), up 33% y-o-y.

The company went public in September this year after a successful initial public offering (IPO).